Simulate population wealth over time
Question
Suppose you're given the following information about a population and its wealth distribution:
- Population size: 2500
- Mean income (in USD, thousands): 50
- Standard deviation of income (in USD, thousands): 12.5
- The population wealth is initially normally distributed
Additionally, you're told that economic transactions occur randomly between two individuals in the population. In a transaction, two parties come together and there is an exchange of wealth. For the purposes of this question, the transactions can be modeled in the following way:
- Two individuals come together at random
- When they interact, their wealth is put into a pot, and is then split randomly and uniformly between the two parties
Given this information, write a simulation to show how the wealth of the population will change over time. You can simulate 50 time steps (or transactions per individual).