Correlation between Gini index and mobility in a stochastic kinetic model of economic exchange

Abstract

Starting from a class of stochastically driven kinetic models of economic exchange, here we present results highlighting the correlation of the Gini inequality index with the social mobility rate, close to dynamical equilibrium. Except for the ”canonical-additive case”, our numerical results consistently indicate negative values of the correlation coefficient, in agreement with empirical evidence. This confirms that growing inequality is not conducive to social mobility which then requires an “external source” to sustain its dynamics. On the other hand, the sign of the correlation between inequality and total income in the canonical ensemble depends on the way wealth enters or leaves the system. At a technical level, the approach involves a generalization of a stochastic dynamical system formulation, that further paves the way for a probabilistic formulation of perturbed economic exchange models.

Publication DOI: https://doi.org/10.1016/j.rinp.2017.05.031
Divisions: College of Engineering & Physical Sciences > School of Informatics and Digital Engineering > Mathematics
College of Engineering & Physical Sciences > Systems analytics research institute (SARI)
Additional Information: Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)
Uncontrolled Keywords: Langevin,Gini,Ornstein-Uhlenbeck,Fokker-Planck,Hurst,Physics and Astronomy(all)
Publication ISSN: 2211-3797
Full Text Link:
Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2017
Published Online Date: 2017-06-24
Accepted Date: 2017-05-07
Authors: Bertotti, Maria Letizia
Chattopadhyay, Amit K. (ORCID Profile 0000-0001-5499-6008)
Modanese, Giovanni

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