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The mutual influence of knowledge and individual wealth growth

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  • Xia Zhou

    (Yili Normal University
    Southwestern University of Finance and Economics)

  • Shaoyong Lai

    (Yili Normal University
    Southwestern University of Finance and Economics)

Abstract

Employing the kinetic theory, we investigate the mutual role of knowledge accumulation and individual wealth growth. For the accumulation of individual knowledge, we introduce a learning function with the spirit of prospect theory to describe the microscopic variation of agents’ knowledge and develop a kinetic model of knowledge evolution. Considering the wealth depending on knowledge and their mutual dependence, we construct a joint evolutionary model of knowledge and individual wealth. Our numerical experiments demonstrate that if knowledge reduces the risk of individual wealth growth or increases the wealth of low-wealth groups, wealth inequality decreases. In the case that the wealthy have more opportunities to choose good educational environment to learn knowledge, both knowledge and wealth inequality increase. When considering the government or state educational input, the inequality of knowledge and wealth decreases. Graphic Abstract

Suggested Citation

  • Xia Zhou & Shaoyong Lai, 2023. "The mutual influence of knowledge and individual wealth growth," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 96(6), pages 1-22, June.
    • Handle: RePEc:spr:eurphb:v:96:y:2023:i:6:d:10.1140_epjb_s10051-023-00543-w
    DOI: 10.1140/epjb/s10051-023-00543-w
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    References listed on IDEAS

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