Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/32155 
Year of Publication: 
2008
Series/Report no.: 
CoFE Discussion Paper No. 08/02
Publisher: 
University of Konstanz, Center of Finance and Econometrics (CoFE), Konstanz
Abstract: 
We introduce and discuss a kinetic model for wealth distribution in a simple market economy which is built of a number of countries or social groups. Our approach is based on the model with risky investments introduced by Cordier, Pareschi and one of the authors in [13] and borrows ideas from the kinetic theory of mixtures of rarefied gases. Wealth is exchanged by individuals inside these countries (domestic trade) as well as in between different countries (international trade). Under a suitable scaling we derive a system of Fokker-Planck type equations and discuss its extension to a two-dimensional model with distributed trading propensity. Theoretical and numerical results for two groups show that the wealth distribution develops a bimodal (and in general, a polymodal) shape.
Subjects: 
Wealth and income distributions
Boltzmann equation
mixture
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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