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Effects of taxation on money distribution

Author

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  • Diniz, M.
  • Mendes, F.M.

Abstract

The study of how money is distributed among a great number of agents has called the attention of econophysics researchers since the late 1990s. Following the setup proposed by Dragulescu and Yakovenko (2000) to simulate a dynamic economy, we investigate how the money distribution is affected by a government that collects taxes and gives this amount back to the agents periodically. We propose different taxation schemes and compare them using the Gini coefficient associated to the stationary money distribution.

Suggested Citation

  • Diniz, M. & Mendes, F.M., 2012. "Effects of taxation on money distribution," International Review of Financial Analysis, Elsevier, vol. 23(C), pages 81-85.
  • Handle: RePEc:eee:finana:v:23:y:2012:i:c:p:81-85 DOI: 10.1016/j.irfa.2011.06.014
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    References listed on IDEAS

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    Cited by:

    1. Cockshott, Paul & Zachariah, David, 2014. "Conservation laws, financial entropy and the Eurozone crisis," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 8, pages 1-55.

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    Keywords

    Money distribution; Statistical physics;

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