Why the rich become richer: insights from an agent-based model. (2016)

• Record Type: Journal Article
• Authors: Desiderio, Saul; Chen, Siyan
• Is Part Of: International journal of computational economics and econometrics. Volume 6:Number 3(2016)
• Page Start: 258
• Page End: 275
• Publication Date: 2016
• Subjects: agent-based modelling -- income distribution -- wealth distribution -- Gini coefficient -- wealth inequality -- agent-based systems -- multi-agent systems -- MAS -- macroeconomic models -- simulation -- financial investments -- wealth accumulation -- wealth-dependent asymmetries -- power law tail; Econometrics -- Periodicals; Economics -- Data processing -- Periodicals; 330.01519505
• Languages: English
• ISSNs: 1757-1170

Abstract

The aim of this paper is to investigate the reason why the rich get richer in an agent-based macroeconomic model. It shows that simulated top income and wealth follows a power law. From a dynamical point of view, it is found that revenues from financial investments are the key factor to sustaining wealth accumulation. In other words, wealth-dependent asymmetries among agents generates the power law tail.