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SOE: Fachverband Physik sozio-ökonomischer Systeme
SOE 8: Economic Models I
SOE 8.2: Vortrag
Dienstag, 21. März 2017, 10:30–10:45, GÖR 226
When does inequality freeze an economy? — Joao Pedro Jerico1, Francois Landes2, Isaac Perez Castillo3, Matteo Marsili2, and •Valerio Volpati4 — 1Departamento de Fisica General, Instituto de Fisica, Universidade de Sao Paulo, Brazil — 2The Abdus Salam International Centre For Theoretical Physics (ICTP), Trieste, Italy — 3Department of Complex Systems, Institute of Physics, UNAM, Mexico — 4Institut de Physique Theorique, CEA, Gif-sur-Yvette, France
Inequality and its consequences are the subject of intense recent debate. Using a simplified model of the economy, we address the relation between inequality and liquidity, the latter understood as the frequency of economic exchanges. Assuming a Pareto distribution of wealth for the agents, that is consistent with empirical findings, we find an inverse relation between wealth inequality and overall liquidity. We show that an increase in the inequality of wealth results in an even sharper concentration of the liquid financial resources. This leads to a congestion of the flow of goods and the arrest of the economy when the Pareto exponent reaches one.