Now some European physicists have used ... a model to examine a different question: How does a significant change in inequality affect the overall level of exchange? Their study makes use of some fairly abstruse mathematics coming from physics, developed precisely for messy network problems of this kind. What they find is troubling, although not all that surprising -- rising inequality tends to undermine exchange...The reason is quite simple. As inequality gets more pronounced, a larger fraction of the population faces more stringent budget constraints, and the spectrum of possible economic interactions open to them narrows. Fewer people have the wherewithal to engage in economic activity. This mathematical economy actually demonstrates a sharp transition, akin to the abrupt freezing of a liquid, as the level of inequality exceeds a certain threshold. Worryingly, the wealth distribution in the U.S. over the past few decades has been moving ever closer to this critical edge...
http://finance.yahoo.com/news/chilling-math-inequality-110020327.html
We have a probability distribution of transactions. It is skewed, rich people make much larger transactions, less frequently. Little people do not have the second derivative to catch up, they are stuck in line. Its like in a multi theaters, with multiple ticket clerks. A cub sout troop shows up for Batman, the ticket clerks have to re-arrange the movie title on their boxes, customers have to re-arrange the queues. If not, the movies will start, bets will clear not to some folks advantage, if they're stuck in line.
No comments:
Post a Comment