Economy – Quantitative Finance – General Finance
Scientific paper
2010-05-19
Physica A, 389 17 3572 (2010)
Economy
Quantitative Finance
General Finance
15 pages, 5 figures
Scientific paper
In the last decade, a large body of literature has been developed to explain the universal features of inequality in terms of income and wealth. By now, it is established that the distributions of income and wealth in various economies show a number of statistical regularities. There are several models to explain such static features of inequality in an unifying framework and the kinetic exchange models, in particular, provide one such framework. Here we focus on the dynamic features of inequality. In the process of development and growth, inequality in an economy in terms of income and wealth follows a particular pattern of rising in the initial stage followed by an eventual fall. This inverted U-shaped curve is known as the Kuznets Curve. We examine the possibilities of such behavior of an economy in the context of a generalized kinetic exchange model. It is shown that under some specifi?c conditions, our model economy indeed shows inequality reversal.
Chakrabarti Anindya S.
Chakrabarti Bikas K.
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