We analyse the data from the recently published lists of the richest Chinese from the year 2003 to 2005. The results confirm that in these years the wealth is distributed according to a power law with exponents between 1.758 and 2.285 in the high end. The power distribution is found to be quite robust although the persons in the list change drastically and the wealth increases rapidly. The relation between the wealth and the absolute change of wealth rejects the notion that the wealth evolution is a multiplicative stochastic process.

https://iopscience.iop.org/article/10.1088/0256-307X/24/8/076/pdf

Power-Law Tail in the Chinese Wealth Distribution

In a closed economic system, money is conserved. Thus, by analogy with energy, the equilibrium probability distribution of money must follow the exponential Boltzmann-Gibbs law characterized by an eective temperature equal to the average amount of money per economic agent. We demonstrate how the Boltzmann-Gibbs distribution emerges in computer simulations of economic models. Then we consider a thermal machine, in which the dierence of temperatures allows one to extract a monetary prot. We also discuss the role of debt, and models with broken time-reversal symmetry for which the Boltzmann-Gibbs law does not hold. The instantaneous distribution of money among the agents of a system should not be confused with the distribution of wealth. The latter also includes material wealth, which is not conserved, and thus may have a dierent (e.g. power-law) distribution. PACS. 87.23.Ge Dynamics of social systems { 05.90.+m Other topics in statistical physics, thermodynamics, and nonlinear dynamical systems { 89.90.+n Other topics of general interest to physicists { 02.50.-r Probability theory, stochastic processes, and statistics

Statistical Mechanics of Money

It is known that asset exchange models with symmetric interaction between agents show either a Gibbs/log-normal distribution of assets among the agents or condensation of the entire wealth in the hands of a single agent, depending upon the rules of exchange. Here we explore the effects of introducing asymmetry in the interaction between agents with different amounts of wealth (i.e., the rich behave differently from the poor). This can be implemented in several ways: e.g., (1) in the net amount of wealth that is transferred from one agent to another during an exchange interaction, or (2) the probability of gaining vs. losing a net amount of wealth from an exchange interaction. We propose that, in general, the introduction of asymmetry leads to Pareto-like power law distribution of wealth.

pdf/the-rich-are-different-pareto-law-from-asymmetric-52t3y7y1kr.pdf

The Rich Are Different ! Pareto Law from Asymmetric Interactions in Asset Exchange Models

In this paper, the dynamical process of money creation in a random exchange model with debt is investigated. The money creation kinetics are analyzed by both the money-transfer matrix method and the diffusion method. From both approaches, we attain the same conclusion: the source of money creation in the case of random exchange is the agents with neither money nor debt. These analytical results are demonstrated by computer simulations.

Money creation process in a random redistribution model

In this paper, we investigate the economic mobility in four money transfer models which have been applied into the research on wealth distribution. We demonstrate the mobility by recording the time series of agents’ ranks and observing their volatility. We also compare the mobility quantitatively by employing an index, “the per capita aggregate change in log-income”, proposed by economists. Like the shape of distribution, the character of mobility is also decided by the trading rule in these transfer models. It is worth noting that even though two models have the same type of distribution, their mobility characters may be quite different.

The economic mobility in money transfer models

We introduce preferential behavior into the study on statistical mechanics of money circulation The computer simulation results show that the preferential behavior can lead to power laws on distributions over both holding time and amount of money held by agents However, some constraints are needed in generation mechanism to ensure the robustness of power-law distributions

Power-law distributions in circulating money: effect of preferential behavior

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Power-law distributions in circulating money: effect of preferential behavior