The economic conditions for wealth condensation
Posted on:1/28/2006
| The first condition is an unequal distribution in the first place. |
The first condition is an unequal distribution in the first place. Without this there is nothing for the new wealth to 'condense' onto. This condition is surely safisfied in developed nations in 2005. In their wealth condensation model Bouchard & Mezard estimate that 90% of "total wealth" is owned by 5% of the population in many rich countries. They say that the distribution of wealth throughout the population is closely described by a Pareto-tails function, which decay as a power-law in wealth. (See also: Economic inequality).
A team from Jagellonian University produced statistical model economies showing that wealth condensation can occur whether or not total wealth is growing (if it isn't this means that the poor get extremely poor).
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