Applying Statistical Physics to Economics

Columbia University, NYC - On Thursday, March 23, 2017, The AESA NY-NJ

Section along with the Armenians in Banking and Finance (ABF) jointly hosted a

lecture entitled “Applying Statistical Physics to Economics: Agent-Based Models

of Wealth Distributions”. The lecture was presented by Professor Bruce Boghosian, a Professor of Mathematics at Tufts University and a former President of the

American University of Armenia. His lecture discussed the increased disparity between rich and the poor populations in the world, how economists and mathematicians can model this graphically and how these graphs have changed over time.

There are numerous models employed by today’s economists, but they are all

based on the Lorenz Curve, developed by Max O. Lorenz in 1905, which is a

graphical representation of the distribution of income or wealth which shows the

inequality of wealth distribution. Professor Boghosian described the results he obtained using a particular as-set-exchange model called the “Extended Yard-Sale Model”, showing that it exhibits a second-order phase transition, known as“wealth condensation” to an oligarchical state in which a finite fraction of the population’s wealth falls unto the hands of the wealthiest agent. In fact today there are (8) eight people in the work who have as much combined wealth as half of the human population.

The lecture was well attended by more than 20 professionals in various fields of study including economics, International Relations, Engineering and Physics.

© 2018 By AESA Northeastern Section

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