DEPARTMENT OF MATHEMATICAL SCIENCES

APPLIED AND COMPUTATIONAL MATHEMATICS SEMINAR

**Speaker:**Victor Yakovenko, Department of Physics, University of Maryland, College Park

**Title: ***
Statistical Mechanics of Money, Income, Debt, and Energy Consumption
*

**Abstract:**
By analogy with the probability distribution of energy in
statistical physics, I argue that the probability distribution of money in a
closed economic system should follow the exponential Boltzmann-Gibbs law.
Analysis of the empirical data shows that income distribution in the USA has a
well-defined two-class structure. The majority of the population (about 97%)
belongs to the lower class characterized by the exponential ("thermal")
distribution. The upper class (about 3% of the population) is characterized by
the Pareto power-law ("superthermal") distribution, and its share of the total
income expands and contracts dramatically during bubbles and busts in financial
markets. The probability distribution of energy consumption per capita around
the world also follows the exponential Boltzmann-Gibbs law, which is consistent
with entropy maximization. For more information, see
http://physics.umd.edu/~yakovenk/econophysics/

**Time:** Friday, October 19, 2012, 1:30-2:30 p.m.

**Place:** Planetary Hall (formerly S & T I), Room 242

Department of Mathematical Sciences

George Mason University

4400 University Drive, MS 3F2

Fairfax, VA 22030-4444

http://math.gmu.edu/

Tel. 703-993-1460, Fax. 703-993-1491