so we are today with vector you are combined co was a professor of physics
at the university of marilyn and also one of our grantees most recent grantees for
very interesting project called statistical physics approach to income and wealth distribution were compared to
thank you
so i just read your proposal and refresh my memory of this and so this
is basically a kind of physics yes that's gonna start value s and just before
we started talking you said it's basically money is a gas okay so that the
this is a joke so we just translate is from my understanding
you're thinking about the distribution of well as we shouldn't come up in the same
way that you think about the distribution of energy states in a gas and you
know in a confined in our
yes i get this idea actually quite a long time ago all in fact when
i was undergraduate that wasn't so it you know
and i was three the statistical physics for the first time that x local statistical
theory for the first time and i was deeply impressed that the duration of this
fundamental the low statistical physics recyclables one gives distribution
is also present a simple was based on very few assumptions so essentially multimodal problem
we consider the physics of the fallen suppose we consider aaron this rule so that
more tickles moving around
and now which is that more equal say with the same time to oxygen wanted
to the exactly the same identical
and yet if you measure instantaneous the distribution of the and that's just and this
experiments have been done
you find a very broad distribution
in experiment that has a high energy that's moving fast that's right some a low
energy i think there is like absolutely some model system articles move very fast to
verify kinetic energy and some of the movement with a slower and everything between but
what is important is this but that a few works as you more details that
have high energy
and menu oxygen what could have a low energy and it comes out automatically that
we can derive the that the of the shape of the distribution is exactly like
that few is kind is you many was low energy but i still is for
the first m s is so general must be applicable to sound though places outside
the physics
and the so what whether to take economics was used really not physics and in
the normal equations of motion or newton said that a in the economics the big
statistical ensemble and that sounds in there that sensitive to resemble statistical physics and by
serological so maybe one can transfer this ideas the difference that use the consumption economics
and particular to this problem of in the what'd you
she people have a lot and many people have a little now so we need
actually looked at the data
okay what you find as far as i gather is that this belt and gives
distribution fits most of the data you okay but that there's a little piece in
the upper tail
that doesn't really fit yes absolutely that was very surprising finding i would have expected
that well we'll distribution of if it by a very simple exponential functions one of
the simple six is a mathematical functions
and what the founder started looking at they to be downloaded data from i address
the task tax data from your of sensors and other government agencies soda found is
that most of this datum is starting from the bottom and map two hundred two
hundred some sense out of the sounds and dollars per year and your income
it is very will feel of exponential but then we found that the pool table
to verify pale
show for a different distribution which describe a power law subject by fitting the data
and this is a my proposal one can describe the whole distribution by two different
distinct mathematical functions an exponential for the majority a population say at the bottom also
to say all the ipod lower class overlap about the throngs but for the upper
class
which is few percent one three percent of two three percent is described by powerful
now one of the things that i think probably made our referees really attracted by
your proposal is that you try to go a bit for than that and to
suggest that perhaps this to distribution characterisation
is it is an indication that there's something well okay is that there's a kind
of what you talk about is a kind of i think with normal inequality and
abnormal in yes
yes absolutely so cycle that the nature of inequality
because of the inequality exist and also sizes even and socially society where we assume
that wasn't what is the last night less than in market but nevertheless so in
order to some degree of an which is apparently inevitable and but question is by
one last question what is kind of nature of the words with this view on
angel
so we make a mathematical conjecture that the exponential distribution that the two d was
measured network but what we see on top of these naturalness what is your
that will be something different would be not nature a lot of abnormal or something
like that and once we once with the this the composition of the whole distributions
the two classes then there are able to analyze the trends historical chance so what
the found is that first of all the exponential what is extremely stable real data
for ten twenty thirty years
it is just the same meaning the scale changes because it has a scale which
is that it was you come up with evolution continuum and audible or say double
in twenty years i mean doors not adjusted for the shape of that is really
she's distributions this exact the same so it's extremely stable but then the look and
the share
of total income that goes to the upper class upper-class me of the spiral on
top of exponential and the father had it then a vehicle variable so basically it
was same the level of maybe ten percent also one and two ninety five but
from ninety five to two thousand example tomb almost twenty percent that was the bubble
the dot com babble
okay when the bubble collapse the should decrease dropped down by a factor of two
then the house and babble
babble doubled again extra more than double six to twenty percent and rocked again during
the next christ assassinate and so crisis another indication is actually cover and median we
have recovered image means a class is recovering
we see missing become very strange situation and i to state a class is recovering
what is global class
is this is not recoverable but is so one of the things you're trying to
do in this project no as far as i understand is to think about what
kind of process could be driving the parallel corpus so you talk about maybe competitive
markets to talk about campus production problem profits and cm primary s
that's right the size so far this was a disk empirical observations knowledge we want
to do this within this proposal is actually to develop some models
to explain it all to follow the in n x the set or and one
reading kind of input a conceptual question but was it is make use of relevant
is that
the share of the upper class discover uncommon to six plus was recorded at least
sure and the question is where well it wasn't one and so for example is
possible that the a this work was showgirls to such a degree
the economic activity will essentially stop for the for the reason because the word classing
blue loses position power so they can a byproduct so there's no point to produce
a new product because it a proportion power
and said that his different incarnations within this mc and cm by coming from economics
background is me
you're essentially talking about the kind of aggregate demand probably say that might arise because
of rising inequality that that's a sort of drag one and demanded the way it
shows up in your models
is different than the way we do it in economics of so i'm interested in
the dialogue that you been having i suppose with the contrast
because use you saying a proposal that you join this the kind of physics group
in two thousand
but you also just told me now that you were thinking this way back as
an undergraduate so tell me about that how you came in a kind of is
i
right okay so right so that's very interesting still save as a set in the
i got this idea of source files and the right advisories the text with the
force time that was actually ten volume words
or of a theoretical physics bilateral relations that will five like in a bit always
statistical physics so again this idea but the key but the kind of from the
back of my mind because well i was added value that was i wanted to
the would then i wouldn't the was it was important for you
so anyway so i finish the wardens i get my p d and theoretical physics
a get the if faculty positions contrastive might also always that the kind of is
why around here two thousand actually that one reason
i related to get tenure so to use a i difficulty of thirty coffee is
gonna get my junior and then i actually decided this time actually well i and
the you know present this idea but second reason was around your two thousand this
on the physics one but start
so it was is that you can the physics was invented by agents ten thirty
of is so anyway this movement
most of not by need by mike what physicists late nineties
and i realise move with the start and so i by that you in it
because if a bit longer to know somebody else will do so the agenda second
if it is normal but this almost decreases
no and since then a punishment yours paper about all statistical mechanics of money of
this year two thousand and says that start to propagate this idea because it is
not enough to write the paper to publish paper and the standard great your work
to propagate this idea to what economics and social science
and that the that's what it will it with a little you're in our decision
here's a time trend this and i think and gradually making progress in propagation this
a ds but not easy but for example router you paper two thousand nine with
but are also available melodic one i missed us to probably but this by performing
some residual the use of modern physics
okay that also get to know duncan forty which is very unconventional one and this
at in school and winners are trendy and one of great use of mine at
and what and usual thing about that can use that he actually took a course
of statistical physics
he took physics course and then through the paper tonight just before i do my
paper proposes similar ideas is possible solutions in economics because you statistical physics of the
problem is mostly what i missed don't have this background they have no what they
can statistical physics the make and they can mathematic or statistics but
that's not the same thing statistical if we discuss the set of ideas like for
example is and is just visual for gases so anyway so that's why develop and
i like and communication and kind of kind of the synthesis of ideas it's a
very non-zero process
a request to size of different know which if i gather what you're saying one
of the ideas of a being a nine a grantee is to have a larger
audience in with some of this is about learning to talk to a condom as
and having economist learn to talk to you absolutely beyond rates you're find a unique
opportunity
to ensure that
with was for thinking a quantum is a general just anyone and makes a conan
is thinking looking for new economic thinking so when the new ideas not everybody's all
and so that's really a the main the main advantage well all of this is
you know incredibly fast at me a new way of thinking about data and phenomenon
the columns of in studying for centuries and i'm that new economic thinking is new
thinking about the economy not necessarily back on a bus so from our way of
thinking you and i met economist out and i welcome you
the thank you very much