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Wealth Condensation in Pareto Macro-Economies

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Listed:
  • Z. Burda
  • D. Johnston
  • J. Jurkiewicz
  • M. Kaminski
  • M. A. Nowak
  • G. Papp
  • I. Zahed

Abstract

We discuss a Pareto macro-economy (a) in a closed system with fixed total wealth and (b) in an open system with average mean wealth and compare our results to a similar analysis in a super-open system (c) with unbounded wealth. Wealth condensation takes place in the social phase for closed and open economies, while it occurs in the liberal phase for super-open economies. In the first two cases, the condensation is related to a mechanism known from the balls-in-boxes model, while in the last case to the non-integrable tails of the Pareto distribution. For a closed macro-economy in the social phase, we point to the emergence of a ``corruption'' phenomenon: a sizeable fraction of the total wealth is always amassed by a single individual.

Suggested Citation

  • Z. Burda & D. Johnston & J. Jurkiewicz & M. Kaminski & M. A. Nowak & G. Papp & I. Zahed, 2001. "Wealth Condensation in Pareto Macro-Economies," Papers cond-mat/0101068, arXiv.org.
    • Handle: RePEc:arx:papers:cond-mat/0101068
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    Cited by:

    1. Chinedu Miracle Nevo & Stanley Egenti, 2019. "A Disaggregated Analysis of Wealth Status and Educational Attainment in Nigeria Using the Multinomial Logit Approach," Economies, MDPI, vol. 7(2), pages 1-9, May.
    2. Leopoldo S'anchez-Cant'u & Carlos Arturo Soto-Campos & Andriy Kryvko, 2016. "Evidence of Self-Organization in Time Series of Capital Markets," Papers 1604.03996, arXiv.org, revised Mar 2017.

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