Statistical mechanics approach to the probability distribution of money
This Chapter reviews statistical models for the probability distribution of money developed in the econophysics literature since the late 1990s. In these models, economic transactions are modeled as random transfers of money between the agents in payment for goods and services. Starting from the initially equal distribution of money, the system spontaneously develops a highly unequal distribution of money analogous to the Boltzmann-Gibbs distribution of energy in physics. Boundary conditions are crucial for achieving a stationary distribution. When debt is permitted, it destabilizes the system, unless some sort of limit is imposed on maximal debt.
|Date of creation:||Jul 2010|
|Date of revision:|
|Publication status:||Published in "New Approaches to Monetary Theory: Interdisciplinary Perspectives", ed. by Heiner Ganssmann, ISBN 978-0-415-59525-4, Routledge (2011), pp 104-123, Ch. 7|
|Contact details of provider:|| Web page: http://arxiv.org/|
When requesting a correction, please mention this item's handle: RePEc:arx:papers:1007.5074. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (arXiv administrators)
If references are entirely missing, you can add them using this form.