Wealth rheology
Zdzislaw Burda (1), Malgorzata J. Krawczyk (1), Krzysztof Malarz (1),, and Malgorzata Snarska (2) ((1) AGH University of Science, Technology,, Faculty of Physics, Applied Computer Science, (2) Cracow University of, Economics, Department of Financial Markets)
TL;DR
This paper investigates the dynamics of wealth rank correlations over time using a simple macroeconomic model and real-world data, revealing how wealth exchange and growth volatility influence wealth reshuffling.
Contribution
It introduces a model to quantify wealth rank correlations and applies it to real data, highlighting the impact of economic parameters on wealth distribution dynamics.
Findings
Rank correlation dynamics depend on wealth exchange rate and growth volatility.
Wealth reshuffling speed varies with model parameters.
Empirical analysis of top wealth lists in multiple countries supports the model.
Abstract
We study wealth rank correlations in a simple model of macro-economy. To quantify rank correlations between wealth rankings at different times, we use Kendall's and Spearman's , Goodman--Kruskal's , and the lists' overlap ratio. We show that the dynamics of wealth flow and the speed of reshuffling in the ranking list depend on parameters of the model controlling the wealth exchange rate and the wealth growth volatility. As an example of the rheology of wealth in real data, we analyze the lists of the richest people in Poland, Germany, the USA and the world.
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