Wayne State University

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Physics & Astronomy

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September 7, 2017 | 3:45 p.m. - 5:00 p.m.
Category: Seminar
Location: Physics #245 | Map
666 W. Hancock
Detroit, MI 48201
Cost: Free

Victor Yakovenko

Department of Physics, University of Maryland, College Park

By analogy with the probability distribution of energy in statistical physics, the probability distribution of money among the agents in a closed economic system is expected to follow the exponential Boltzmann-Gibbs law, as a consequence of entropy maximization.  Analysis of empirical data shows that income distributions in the USA, European Union, and other countries exhibit a well-defined two-class structure.  The majority of the population (about 97%) belongs to the lower class characterized by the exponential ("thermal") distribution.  The upper class (about 3% of the population) is characterized by the Pareto power-law ("superthermal") distribution, and its share of the total income expands and contracts dramatically during booms and busts in financial markets.  Such a two-class distribution can be obtained analytically for a combination of additive and multiplicative stochastic processes.  Globally, data analysis of energy consumption (and CO2 emission) per capita around the world in the last 30 years shows decreasing inequality and convergence toward the exponential probability distribution, in agreement with the maximal entropy principle.  All papers are available at http://physics.umd.edu/~yakovenk/econophysics/.

For more information about this event, please contact W.J. Llope at 3135779805 or wjllope@wayne.edu.