Wealth Concentration Leads to Wealth Extraction

This paper presents the results of applying the mortality multiplier approach to estate duty statistics in order to estimate the size distribution of personal wealth in the Republic of Ireland. It commences with an examination of the limitations of the estate duty statistics, a discussion of the problems involved in collecting the data, and a short consideration of the mortality multipliers used.Estimates are presented for the size distribution of personal wealth, and the distribution of wealth between age groups. Some comparisons are given with wealth in Northern Ireland, Great Britain and the U.S.A. Estimates of the components of personal capital were not found possible.Finally, preliminary estimates are made for the distribution of wealth among married and single persons, in order to provide the basis for an analysis of wealth possessed by wealth‐owning units (defined as single males, single females and married couples). By making extreme assumptions, upper and lower limits are placed on the actual pattern of the size distribution of wealth by wealth‐owning units.

In this paper, we introduce a large system of interacting financial agents in which all agents are faced with the decision of how to allocate their capital between a risky stock or a risk-less bond. The investment decision of investors, derived through an optimization, drives the stock price. The model has been inspired by the econophysical Levy-Levy-Solomon model [30]. The goal of this work is to gain insights into the stock price and wealth distribution. We especially want to discover the causes for the appearance of power-laws in financial data. We follow a kinetic approach similar to [33] and derive the mean field limit of the microscopic agent dynamics. The novelty in our approach is that the financial agents apply model predictive control (MPC) to approximate and solve the optimization of their utility function. Interestingly, the MPC approach gives a mathematical connection between the two opposing economic concepts of modeling financial agents to be rational or boundedly rational. Furthermore, this is to our knowledge the first kinetic portfolio model which considers a wealth and stock price distribution simultaneously. Due to the kinetic approach, we can study the wealth and price distribution on a mesoscopic level. The wealth distribution is characterized by a log-normal law. For the stock price distribution, we can either observe a log-normal behavior in the case of long-term investors or a power-law in the case of high-frequency trader. Furthermore, the stock return data exhibit a fat-tail, which is a well known characteristic of real financial data.

This paper surveys and analyzes the available evidence on the distribution of wealth in Australia. On the basis of this evidence, it is argued that the cross‐section distribution of personal wealth reveals considerable concentration in the top tail, with the top 1 per cent of adult individuals holding around 25 per cent of private wealth. The inequality of wealth revealed in the cross‐section distribution among the top 10 per cent of wealth holders is not significantly reduced when adjustments are made to correct for life‐cycle influences. Although the proportion of wealth held by the top 1 per cent of adult individuals has decreased sharply since World War I, the second to tenth percentiles have almost the same proportion in the 1960s and 1970s as in 1915.

This article begins by noting the scarcity of information on the distribution of wealth in Australia, and the many reasons for wanting to have such information. The potential role of the tax system in affecting the composition of wealth is noted, and the taxation of savings is briefly described. A number of different methods of estimating the distribution of wealth are discussed. Estimates for the distribution and composition of wealth in Australia in 1986 are derived from the 1986 Income Distribution Survey, which suggest that the wealthiest ten per cent of income units hold 55 per cent of total wealth. The composition of wealth is broadly consistent with the expected impact of the tax system.

This article studies the impact of internal migration and remittance flows on wealth accumulation and distribution in 51 rural villages in Nang Rong, Thailand. Using data from 5,449 households, the study constructs indices of household productive and consumer assets with principal component analysis. The changes in these indices from 1994 to 2000 are modeled as a function of households' prior migration and remittance behavior with ordinary least squares, matching, and instrumental variable methods. The findings show that rich households lose productive assets with migration, potentially because of a reduction in the labor force available to maintain local economic activities, while poor households gain productive assets. Regardless of wealth status, households do not gain or lose consumer assets with migration or remittances. These results suggest an equalizing effect of migration and remittances on wealth distribution in rural Thailand.

Addressing wealth and income inequality requires a thorough understanding of the mechanisms driving these disparities. Agent-Based Models (ABMs) offer a powerful tool for simulating these complex systems, capturing the intricate interplay of individual behaviors and emergent macroeconomic trends. Here we consider two existing ABM classes: one, exemplified by the Nirei-Souma (NS) model, which simulates how individuals accumulate wealth through income from work, returns on investments, and consumption, and the other, represented by the Bouchaud-Mezard (BM) model, which emphasizes the role of wealth exchanges and random returns in shaping the wealth distribution. Drawing on empirical evidence of wealth and income distribution in Italy, we benchmark both models revealing that they effectively captures Pareto-like wealth distribution, but fail to fully account for the persistent lack of social mobility observed in empirical data. To overcome this limitation, we propose an interacting version of the NS model, integrating it with wealth exchange mechanisms. Through this interacting model, we can show the influence of network topology on wealth distribution and dynamics. Simulations on hierarchical networks yield results that align more closely with empirical observations compared to regular random graphs, highlighting the importance of hierarchical interactions in shaping wealth inequality and social mobility. The model is further analyzed to reveal the interplay between income sources and wealth accumulation.

Democracy and liberalism were only able to join hands on the basis of mutual concessions, but it was democracy that conceded the most ground. Democracy becomes the bridge that allows one to cross back and forth between liberalism and socialism, reformulating both while taking the good points from each. The relationship between liberalism and socialism has also been a confrontational one. Historically, because liberalism has been the fundamental source of inspiration for the development of capitalism, while socialism emerged as the basis for creating a new order to supersede capitalism. With capitalism, markets expand, production of goods for the market is generalized, and trade multiplies, tending to revolve around the labor that is socially concentrated in a product. The exchange of goods based on the social labor they embody, the market, and capitalist exploitation are different phenomena, even if they overlap in capitalism.

We present a theory in which the corporate governance structure in a country is determined by a political majority and show how this decision is related to the distribution of financial wealth. The main argument is that labor claims are exposed to undiversifiable risk, so voters with small financial stakes may prefer a corporate governance structure that reduces corporate risktaking. We discuss the inflationary experiences of different countries in the first part of the twentieth century and argue that the model may explain the »great reversal« phenomenon identified by RAJAN AND ZINGALES [2003].

Analisamos a distribuição e concentração da riqueza concernente a 678 inventários de duas localidades do Vale do Ribeira paulista (Iguape e Xiririca), abertos entre 1800 e 1880. De início, distinguimos a distribuição da riqueza bruta (soma de todos os bens e haveres pertencentes ao inventariado) e da riqueza líquida (riqueza bruta, deduzidas as dívidas passivas). Este segundo padrão realoca a posição de 64% dos patrimônios, destacando-se cerca de 10% cuja riqueza líquida revelou-se negativa. Utilizando como referência a atividade econômica vinculada ao inventariado, avaliamos o impacto do uso das duas medidas na distribuição da riqueza e propusemos a utilização de um índice de Gini que possibilita a incorporação destes valores negativos.

This paper is concerned with measurement of the size distribution of personal wealth in Canada. The only available estimates of this distribution are those provided on the occasions when Statistics Canada's Survey of Consumer Finance has surveyed assets and debts. Results of the latest “SCF” to do this, that of 1977, are not yet available. The paper shows that the previous study, conducted in 1970, indicated wealth‐inequality as viewed by top quantile shares roughly of the same order as estimated by others for the U.S. and U.K. A comparison of asset and debt aggregates implied by the survey, however, with independent totals indicates that for almost all items the SCF likely under‐estimated true holdings. The possible relative importance of sampling and non‐sampling errors in explaining this distortion is considered, drawing on Monte Carlo evidence and American validation studies of survey response. It is concluded that sampling error is unlikely to provide the explanation for SCF discrepancies in aggregates, but that non‐sampling error is capable of doing so. Finally the 1970 SCF distribution of wealth is re‐estimated. First a correction is made for hypothetical differential response according to true net worth. Second an attempt is made to remove the effects of under‐reporting by respondents. The “best‐guess” re‐estimated distribution exhibits mean net worth considerably greater than shown by the SCF but only a slightly greater degree of concentration. Under certain fundamental assumptions this result is surprisingly robust. The appropriate conclusion is not that survey estimates of the distribution of wealth are reliable, but that the strong non‐sampling errors affecting the 1970 Canadian SCF wealth estimates may have been composed of almost completely offsetting sources of bias.

We develop a simple behavioral model of intergenerational transfers, with individuals being subject to uncertainty about their children's incomes. Individuals differ with respect to innate ability and to wealth transfers they receive at birth. The distributions of total wealth, of total income, and of their components are uniquely determined from the equilibrium distribution of intergenerational transfers, for which existence and uniqueness are proven. For a particular utility function and provided that earned income follows a stable law, we show that so do all endogenous distributions. Intergenerational transfers are relatively more equally distributed than earnings, capital income, and lifetime wealth.

Inequality, Concentration of Wealth and the Ownership Structure of Islamic Banks

General statistical patterns in community ecology have attracted considerable recent debate. Difficulties in discriminating among mathematical models and the ecological mechanisms underlying them are likely related to a phenomenon first described by Frank Preston. He noted that the frequency distribution of abundances among species was uncannily similar to the Boltzmann distribution of kinetic energies among gas molecules and the Pareto distribution of incomes among wage earners. We provide additional examples to show that four different 'distributions of wealth' (species abundance distributions, species-area and species-time relations, and distance decay of compositional similarity) are not unique to ecology, but have analogues in other physical, geological, economic and cultural systems. Because these appear to be general statistical patterns characteristic of many complex dynamical systems they are likely not generated by uniquely ecological mechanistic processes.

“Inequality” is a common observation about us, as members of society. In this article, we unify physics with economics by showing that the distribution of wealth is related proportionally to the movement of all the streams of a live society. The hierarchical distribution of wealth on the earth happens naturally. Hierarchy is unavoidable, with staying power, and difficult to efface. We illustrate this with two architectures, river basins and the movement of freight. The physical flow architecture that emerges is hierarchical on the surface of the earth and in everything that flows inside the live human bodies, the movement of humans and their belongings, and the engines that drive the movement. The nonuniform distribution of wealth becomes more accentuated as the economy becomes more developed, i.e., as its flow architecture becomes more complex for the purpose of covering smaller and smaller interstices of the overall (fixed) territory. It takes a relatively modest complexity for the nonuniformity in the distribution of wealth to be evident. This theory also predicts the Lorenz-type distribution of income inequality, which was adopted empirically for a century.

An Examination of Changes in the Distribution of Wealth from 1989 to 1998: Evidence from the Survey of Consumer Finances