{"about":{"site":"https://codewithpapers.app","non_affiliation":"Code with Papers and Syntology are not affiliated with, endorsed by, or sponsored by Papers with Code, Meta, or the pwc-archive mirror.","licence":"CC BY-SA 4.0","licence_url":"https://creativecommons.org/licenses/by-sa/4.0/legalcode","attribution":"https://codewithpapers.app/attribution","modified":"archive material modified by Syntology; see the attribution page"},"url":"/paper/when-does-inequality-freeze-an-economy","title":"When does inequality freeze an economy?","arxiv_id":"1602.07300","date":"2016-04-21","proceeding":null,"authors":[],"abstract":"Inequality and its consequences are the subject of intense recent debate.\nUsing a simplified model of the economy, we address the relation between\ninequality and liquidity, the latter understood as the frequency of economic\nexchanges. Assuming a Pareto distribution of wealth for the agents, that is\nconsistent with empirical findings, we find an inverse relation between wealth\ninequality and overall liquidity. We show that an increase in the inequality of\nwealth results in an even sharper concentration of the liquid financial\nresources. This leads to a congestion of the flow of goods and the arrest of\nthe economy when the Pareto exponent reaches one.","url_abs":"http://arxiv.org/abs/1602.07300v3","url_pdf":"http://arxiv.org/pdf/1602.07300v3.pdf","source":{"archive":"pwc-archive (Hugging Face), CC BY-SA 4.0","snapshot":"2025-07-28","licence_url":"https://creativecommons.org/licenses/by-sa/4.0/legalcode","row_kind":"abstracts"},"code_links":[{"paper_slug":"when-does-inequality-freeze-an-economy","repo_url":"https://bitbucket.org/flandes/ineqfreezeseconomy_montecarlo_mastereq","is_official":1,"mentioned_in_paper":1,"mentioned_in_github":1,"framework":"none","reach":null}],"tasks":[{"task_slug":null,"task_name":"Relation"}],"methods":[],"datasets_introduced":[],"methods_introduced":[],"results":[],"syntology":{"atlas_url":null,"mcp":null,"developers":"https://syntology.ai/developers"},"arxiv_metadata":null,"syntology_extracted_results":null}