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

TL;DR

This paper surveys how statistical physics models can describe the distribution of money, income, and wealth, showing that these distributions follow exponential and power-law patterns based on empirical data.

Contribution

It extends previous work by providing a detailed comparison between statistical physics models and real-world economic data on wealth and income distributions.

Findings

Distributions follow exponential and power-law functions

Models align well with empirical data

Provides a unified physics-based framework for economic inequality

Abstract

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.