Showing papers by "Arnab Chatterjee published in 2007"

Kinetic exchange models for income and wealth distributions

Abstract: Increasingly, a huge amount of statistics have been gathered which clearly indicates that income and wealth distributions in various countries or societies follow a robust pattern, close to the Gibbs distribution of energy in an ideal gas in equilibrium. However, it also deviates in the low income and more significantly for the high income ranges. Application of physics models provides illuminating ideas and understanding, complementing the observations.

Kinetic Exchange Models for Income and Wealth Distributions

Abstract: Increasingly, a huge amount of statistics have been gathered which clearly indicates that income and wealth distributions in various countries or societies follow a robust pattern, close to the Gibbs distribution of energy in an ideal gas in equilibrium. However, it also deviates in the low income and more significantly for the high income ranges. Application of physics models provides illuminating ideas and understanding, complementing the observations.

Econophysics of Markets and Business Networks : Proceedings of the Econophys-Kolkata III

Abstract: John Angle (Inequality Process Institute, Washington) The Macro Model of the Inequality Process Explains a Quirky Aspect of U.S. Wage Incomes, 1961-2003: The Surge in Wage Income Nouveaux Riches Giulio Bottazzi (Univ. Pisa, Pisa) Title not yet available Bikas K. Chakrabarti (Saha Inst. Nuclear Physics, Kolkata) Kinetic models of wealth distribution Anirban Chakraborti (Banaras Hindu Univ, Varanasi) Generalized statistical models of economy markets Guilia De Massi (Univ. Polit. De Marche, Ancona) Debt-credit economic networks of banks and firms: the Italian case Zengru Di (Beijing Normal Univ., Beijing) Weighted Network for Scientific Collaboration of Econophysicists: Statistics and Evolution Mauro Gallegati (Univ. Polit. De Marche, Ancona) Title not yet available Janusz Holyst (Warsaw Univ. Tech., Warsaw) Title not yet available Sanjay Jain (Delhi Univ., Delhi) Autocatalytic networks and economic growth: A mathematical model Neil F. Johnson (Oxford Univ, Oxford) Inferring the Composition of a Trader Population in a Financial Market Subhrangshu Sekhar Manna (S N Bose Center for Basic Sciences, Kolkata) Title not available Jurgen Mimkes (Univ. Paderborn, Paderborn) Econophysics: Calculus vs. Economic Standard Models Manipushpak Mitra (Indian Statistical Institute, Kolkata) Preferences Lower Bound in the queing model Prashanta K Panigrahi (Physical Research Laboratory, Ahmedabad) Variations in Financial Time Series: Modelling through Wavelets and Genetic Programming Peter Richmond (Trinity College, Dublin) Empirical studies and models of income distributions in society Massimo Salzano (Univ. Salerno, Salerno) Title not yet available M. S. Santhanam (Physical Research Laboratory, Ahmedabad) Estimation of delay in information flow among stocks Abhirup Sarkar (Indian Statistical Institute, Kolkata) Knowledge Sharing and R & D Investment Aki-Hiro Sato (Univ. Kyoto, Kyoto) Dynamical structure of behavioral similarities of the market participants in the foreign exchange market Sitabhra Sinha (Inst. Mathematical Sciences, Chennai) Collective Behavior in the Indian Stock Market: Cross-correlation structure of stock movement in NSE Wataru Souma (ATR Networks, Kyoto) Networks of firms and a ridge in the production space

Economic Inequality: Is it Natural ?

Abstract: We are all aware of the hard fact: neither wealth nor income is ever uniform for us all. Justified or not, they are unevenly distributed; few are rich, many are poor! Such socioeconomic inequalities seem to be a persistent fact of life ever since civilization began. Can it be that it only reflects a simple natural law, understandable from the application of physics? I. Income and wealth distributions in society Investigations over more than a century and the recent availability of electronic databases of income and wealth distribution (ranging from national sample survey of household assets to the income tax return data available from governmental agencies) have revealed some remarkable features. Irrespective of many differences in culture, history, social structure, indicators of relative prosperity (such as gross domestic product or infant mortality) and, to some extent, the economic policies followed in different countries, the income distribution seems to follow a particular universal pattern, as does the wealth distribution: After an initial rise, the number density of people rapidly decays with their income, the bulk described by a Gibbs or log-normal distribution crossing over at the very high income range (for 5-10% of the richest members of the population) to a power law with an exponent (known as Pareto exponent) value between 1 and 3. This seems to be an universal feature: from ancient Egyptian society 1 through nineteenth century Europe 2,3 to modern Japan 4,5 . The same is true across the globe today: from the advanced capitalist economy of USA 4,5 to the developing economy of India 6 . The power-law tail, indicating a much higher frequency of occurrence of very rich individuals (or households) than would be expected by extrapolating the properties of the bulk of the distribution, was first observed by Vilfredo Pareto 2 in the 1890s for income distribution of several societies at very different stages of economic development. Later, the wealth distribution was also seen to follow similar behavior. Subsequently, there have been several attempts starting around the 1950s, mostly by economists, to explain the genesis of the power law tail (for a review, see Champernowne 3 ). However, most of these models involved a large number of factors that made understanding the essential reason behind the occurrence of inequality difficult. Following this period of activity, a relative lull followed in the 70s and 80s when the field lay dormant, although accurate and extensive data were accumulated that would eventually make possible precise empirical determination of the distribution properties. This availability of large quantity of electronic data and their computational analysis has led to a recent resurgence of interest in the problem, specifically over the last one and half decade. Although Pareto 2 and Gini 7 had respectively identified the power-law tail and the log-normal bulk of the income distribution, the demonstration of both features in the same distribution was possibly first demonstrated by Montroll and Shlesinger 8 through an analysis of fine-scale income data obtained from the US Internal Revenue Service (IRS) for the year 1935-36. It was observed that while the top 2-3 % of the population (in terms of income) followed a power law with Pareto exponent � ≃ 1.63; the rest followed a log-normal distribution. Later work on Japanese personal income data based on detailed records obtained from the Japanese National Tax Administration indicated that the

Economic Inequality: Is it Natural?

Abstract: Mounting evidences are being gathered suggesting that income and wealth distribution in various countries or societies follow a robust pattern, close to the Gibbs distribution of energy in an ideal gas in equilibrium, but also deviating significantly for high income groups. Application of physics models seem to provide illuminating ideas and understanding, complimenting the observations.

A common mode of origin of power laws in models of market and earthquake

Abstract: We show that there is a common mode of origin for the power laws observed in two different models: (i) the Pareto law for the distribution of money among the agents with random-saving propensities in an ideal gas-like market model and (ii) the Gutenberg–Richter law for the distribution of overlaps in a fractal-overlap model for earthquakes. We find that the power laws appear as the asymptotic forms of ever-widening log-normal distributions for the agents’ money and the overlap magnitude, respectively. The identification of the generic origin of the power laws helps in better understanding and in developing generalized views of phenomena in such diverse areas as economics and geophysics.

Ideal-gas-like market models with savings: Quenched and annealed cases

Abstract: We analyze the ideal-gas-like models of markets and review the different cases where a ‘savings’ factor changes the nature and shape of the distribution of wealth. These models can produce similar distribution of wealth as observed across varied economies. We present a more realistic model where the saving factor can vary over time (annealed savings) and yet produce Pareto distribution of wealth in certain cases. We discuss the relevance of such models in the context of wealth distribution, and address some recent issues in the context of these models.

Economic Inequality: Is it Natural?

Abstract: Mounting evidences are being gathered suggesting that income and wealth distribution in various countries or societies follow a robust pattern, close to the Gibbs distribution of energy in an ideal gas in equilibrium, but also deviating significantly for high income groups. Application of physics models seem to provide illuminating ideas and understanding, complimenting the observations.

Two Fractal Overlap Time Series: Earthquakes and Market Crashes

Abstract: We find prominent similarities in the features of the time series for the (model earthquakes or) overlap of two Cantor sets when one set moves with uniform relative velocity over the other and time series of stock prices. An anticipation method for some of the crashes have been proposed here, based on these observations.