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Statistical Mechanics of Money, Income, and Wealth: A Short Survey


  • Adrian A. Dragulescu
  • Victor M. Yakovenko


In this short paper, we overview and extend the results of our papers cond-mat/0001432, cond-mat/0008305, and cond-mat/0103544, where we use an analogy with statistical physics to describe probability distributions of money, income, and wealth in society. By making a detailed quantitative comparison with the available statistical data, we show that these distributions are described by simple exponential and power-law functions.

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  • Adrian A. Dragulescu & Victor M. Yakovenko, 2002. "Statistical Mechanics of Money, Income, and Wealth: A Short Survey," Papers cond-mat/0211175,
  • Handle: RePEc:arx:papers:cond-mat/0211175

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    References listed on IDEAS

    1. Ross, Stephen A., 1976. "The arbitrage theory of capital asset pricing," Journal of Economic Theory, Elsevier, vol. 13(3), pages 341-360, December.
    2. Merton, Robert C, 1973. "An Intertemporal Capital Asset Pricing Model," Econometrica, Econometric Society, vol. 41(5), pages 867-887, September.
    3. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
    4. Fama, Eugene F., 1998. "Market efficiency, long-term returns, and behavioral finance," Journal of Financial Economics, Elsevier, vol. 49(3), pages 283-306, September.
    5. R. Mantegna, 1999. "Hierarchical structure in financial markets," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 11(1), pages 193-197, September.
    6. Shiller, Robert J., 1999. "Human behavior and the efficiency of the financial system," Handbook of Macroeconomics,in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 20, pages 1305-1340 Elsevier.
    7. Richard B. Olsen & Michel M. Dacorogna & Ulrich A. Muller, & Olivier V. Pictet, "undated". "Going Back to the Basics - Rethinking Market Efficiency," Working Papers 1992-09-07., Olsen and Associates.
    8. Benoit Mandelbrot, 2015. "The Variation of Certain Speculative Prices," World Scientific Book Chapters,in: THE WORLD SCIENTIFIC HANDBOOK OF FUTURES MARKETS, chapter 3, pages 39-78 World Scientific Publishing Co. Pte. Ltd..
    9. Chen, Nai-Fu & Roll, Richard & Ross, Stephen A, 1986. "Economic Forces and the Stock Market," The Journal of Business, University of Chicago Press, vol. 59(3), pages 383-403, July.
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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.
    2. Peter J. Lambert & Subbu Subramanian, 2015. "Shaikh and Ragab's `Incomes of the Vast Majority': Some additions and extensions," Working Papers 354, ECINEQ, Society for the Study of Economic Inequality.
    3. Massimiliano Zanin & David Papo & Miguel Romance & Regino Criado & Santiago Moral, 2016. "The topology of card transaction money flows," Papers 1605.04938,
    4. Zanin, Massimiliano & Papo, David & Romance, Miguel & Criado, Regino & Moral, Santiago, 2016. "The topology of card transaction money flows," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 462(C), pages 134-140.

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