Is Wealth Inequality Reversible? A Surveying Parallel Evolution with Complex Economic System

Abstract

This paper builds a stochastic complex economic system with the output, household’s revenue, saving and investment. We not only solve out the closed form solution of agent’s consumption under quadratic utility, but also release the constraint the equilibrium condition between aggregated wealth and aggregated investment weights. We simulate the system by High Performance Computing and observe a fact that is the trend of wealth inequality cannot be stopped and just be slowed down. The results show the financial structure, labor force’s welfare and risk aversion of consumption are significant determinants, while the productivity output and human capital accumulation are insignificant.

Keywords: wealth inequality, complex economic system, determinants of wealth inequality, financial structure