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Statistical Physics Approach to Income and Wealth Distribution

This research project employs ideas from statistical physics to deal with income and wealth inequality, financial instability, and the distribution of energy consumption around the world.

Guided by ideas from statistical physics, such as spontaneous development of wide distributions in an ensemble of initially equal agents, this project shows that maximization of entropy in partitioning of a limited resource among many agents leads to the wide exponential distributions, often confirmed by empirical data. The research focuses on the mathematical modeling of the two-class structure of income distribution (1% vs. 99%) and the effect of growing inequality on dynamics of money flow in the system.