IDEAS home Printed from https://ideas.repec.org/p/arx/papers/1301.5504.html
   My bibliography  Save this paper

Cash Flow Entropy

Author

Listed:
  • Ulrich Kirchner
  • Simon Moolman

Abstract

In this paper we aim to find a measure for the diversity of cash flows between agents in an economy. We argue that cash flows can be linked to probabilities of finding a currency unit in a given cash flow. We then use the information entropy as a natural measure of diversity. This leads to a hirarchical inequality measure, which includes the well-known Theil index as a special case, and a constraint on agent entropy differentials, i.e., the difference between cash inflow and outflow entropies. The last result is particularly intriguing as it formalises the fact that an economy must contain both, cash flow aggregating and cash flow diversifying agents.

Suggested Citation

  • Ulrich Kirchner & Simon Moolman, 2013. "Cash Flow Entropy," Papers 1301.5504, arXiv.org.
    • Handle: RePEc:arx:papers:1301.5504
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/1301.5504
    File Function: Latest version
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:1301.5504. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.