Physics (Internal)

Agent Based Economics and the Relationship between Growth and Wealth Inequality

This event is part of the Preliminary Oral Exam.

Examining Committee: William Klein, Sid Redner, Claudio Chamon, Kevin Black

Abstract: Wealth disparity has been a topic of considerable social and political interest in recent years. We seek to understand the relationship between growth and wealth disparity in the context of agent based economics. We begin by analyzing an ungrowing economy which is intrinsically unstable, leading to a single agent who holds all of the wealth- 'wealth condensation'. Then, we introduce growth of various forms to understand how growth can lead to other (more equal) wealth distributions. We categorize the form and parameters of growth wherein wealth condensation may be either preserved or broken, and when it is broken, study the resulting distribution of wealth. We find that the breaking of wealth condensation can be associated with a phase transition (though not necessarily thermodynamic in origin) between a state where the system exhibits non-ergodic behavior with dynamics similar to the geometric random walk, and an effectively ergodic rescaled steady state which might be describable using a thermodynamic equilibrium approach.