Exchange Models for the Emergence of Income Distribution and Economic Inequality

Exchange Models for the Emergence of Income Distribution and Economic Inequality

M.L. Bertotti G. Modanese 

Faculty of Science and Technology, Free University of Bozen-Bolzano, Piazza Universitá 5, 39100 Bolzano, Italy

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Also motivated by the topical problem of growing economic inequality,  we propose and investigate models describing the formation process of income distribution  in a closed society. Our approach fits in with a complex system perspective. We  look at society as a system composed by a large number of individuals, divided into income classes. The information we derive on observable “macroscopic” features results from the interplay of a whole of interactions - money exchanges, payment of taxes, redistribution of benefits, payment of fines - occur ring between individuals, i.e. at the “microscopic” level. In order to  show the flexibility and the exploratory aspect of the models, we consider and compare cases characterized by different tax rates or in which means-tested welfare policies, tax evasion, taxpayer audits are present.


complex systems, economic inequality, income distribution, income redistribution, micro to macro models, tax audit, tax evasion, taxation, welfare


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