Stable power laws in variable economies; Lotka-Volterra implies Pareto-Zipf
Racah Institute of Physics, Hebrew University of Jerusalem, 91904 Jerusalem, Israel
2 Department of Physics, Trinity College Dublin 2, Ireland
Published online: 15 May 2002
In recent years we have found that logistic systems of the Generalized Lotka-Volterra type (GLV) describing statistical systems of auto-catalytic elements posses power law distributions of the Pareto-Zipf type. In particular, when applied to economic systems, GLV leads to power laws in the relative individual wealth distribution and in market returns. These power laws and their exponent are invariant to arbitrary variations in the total wealth of the system and to other endogenously and exogenously induced variations.
PACS: 87.23.-n – Ecology and evolution / 89.75.Da – Systems obeying scaling laws / 89.65.Gh – Economics, business, and financial markets
© EDP Sciences, Società Italiana di Fisica, Springer-Verlag, 2002