The Circulation of Money and Holding Time Distribution
arXiv:physics/0507147 · doi:10.1016/S0378-4371(03)00074-8
Abstract
We have studied the statistical mechanics of money circulation in a closed economic system. An explicit statistical formulation of the circulation velocity of money is presented for the first time by introducing the concept of holding time of money. The result indicates that the velocity is governed by behavior patterns of economic agents. Computer simulations have been carried out in order to demonstrate the shape of the holding time distribution. We find that, money circulation is a Poisson process in which the holding time probability distribution follows a type of Gamma distribution, and the velocity of money depends on the share for exchange and the number of agents.
arXiv comment20 pages, 6 figures
References in corpus (6)
Cited by in corpus (8)
- Kinetic Exchange Models for Income and Wealth Distributions
- A Unified Framework for the Pareto Law and Matthew Effect using Scale-Free Networks
- How Required Reserve Ratio Affects Distribution and Velocity of Money
- Effects of Saving and Spending Patterns on Holding Time Distribution
- Power-Law Distributions in Circulating Money: Effect of Preferential Behavior
- The topology of card transaction money flows
- The Velocity of Money in a Life-Cycle Model
- Evolution of statistical averages: an interdisciplinary proposal using the Chapman-Enskog method