The European Physical Journal B (EPJ B)

Eur. Phys. J. B 17, 723-729

Statistical mechanics of money

A. Dragulescu - V.M. Yakovenko

Department of Physics, University of Maryland, College Park, MD 20742-4111, USA

yakovenk@physics.umd.edu

Received 22 June 2000

Abstract
In a closed economic system, money is conserved. Thus, by analogy with energy, the equilibrium probability distribution of money must follow the exponential Boltzmann-Gibbs law characterized by an effective temperature equal to the average amount of money per economic agent. We demonstrate how the Boltzmann-Gibbs distribution emerges in computer simulations of economic models. Then we consider a thermal machine, in which the difference of temperatures allows one to extract a monetary profit. We also discuss the role of debt, and models with broken time-reversal symmetry for which the Boltzmann-Gibbs law does not hold. The instantaneous distribution of money among the agents of a system should not be confused with the distribution of wealth. The latter also includes material wealth, which is not conserved, and thus may have a different (e.g. power-law) distribution.

PACS
87.23.Ge Dynamics of social systems - 05.90.+m Other topics in statistical physics,
thermodynamics, and nonlinear dynamical systems - 89.90.+n Other topics of general interest to physicists - 02.50.-r Probability theory, stochastic processes, and statistics

What is OpenURL?