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VERSION:2.0
PRODID:-//RLASKEY//CALENDEROUS//EN
CALSCALE:GREGORIAN
METHOD:PUBLISH
BEGIN:VEVENT
DTSTAMP:20261016T140810Z
LAST-MODIFIED:20141008T130459Z
DTSTART:20141021T193000Z
DTEND:20141021T203000Z
UID:event1320@bu.edu
URL:http://physics.bu.edu/internal/events/show/1320
SUMMARY:Boltzmann and Fokker-Planck Equations for Economic Modeling
DESCRIPTION:Featuring Bruce Boghosian\, Tufts University\nHosted by: David 
	Campbell\nPoster: http://physics.bu.edu/internal//files/get/102114-Boghosia
	n.pdf\n\nPart of the Physics Department Colloquia Series.\n\nAbstract:\n Th
	e Boltzmann equation provides a continuum description of a population of pa
	rticles undergoing pairwise interactions in which they can exchange momentu
	m and energy.  An economy consists of economic agents who engage in pairwis
	e transactions in which they can exchange wealth.  It has long been suggest
	ed that it ought to be possible to write a Boltzmann equation that describe
	s an economy.  This work describes how to do exactly that for a simplified 
	microeconomic model\, called the "Yard-Sale Model."  We also show how\, in 
	the limit of small transactions\, this Boltzmann equation reduces to a nonl
	inear Fokker-Planck equation for the probability distribution function of w
	ealth.\n\n Stability of a market economy is one of the fundamental tenets o
	f classical and neoclassical economics\, dating back at least to Adam Smith
	's "invisible hand" concept.  In spite of that\, we find that our model mar
	ket economy is highly unstable\, with a strong tendency toward oligarchy.  
	Mathematically\, its time-asymptotic state is a singular distribution.  It 
	can be stabilized by adding some mechanism for wealth redistribution\, such
	 as a wealth tax\, in which case its steady state is shown to be similar to
	 the the famous Pareto distribution\, with a cutoff at very low values of w
	ealth and power-law decay at very high values.  Indeed\, this appears to be
	 the first detailed microeconomic explanation of Pareto's century-old law o
	f wealth distribution\, a key observation of macroeconomics.\n\n Along the 
	way\, we will demonstrate how this approach to economic modeling is capable
	 of describing many of the metrics that economists use to characterize weal
	th distribution\, such as the Pareto-Lorenz exponent\, the Gini coefficient
	\, and the Gibrat coefficient.  We will also examine real data and trends o
	ver the last century to emphasize why a fundamental understanding of wealth
	 concentration is more important today than it has been in a very long time
	.
LOCATION:SCI 109\, 590 Commonwealth Avenue\, 02215
STATUS:CONFIRMED
CLASS:PUBLIC
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