Empirically based simulation: The case of twin peaks in national income

Only recently a new stylised fact of economic growth has been introduced, t he bimodal shape of the distribution of per capita income or the twin-peake d nature of that distribution. Drawing on the Summers/Hestons Penn World Ta ble 5.6 (1991) we determine kernel density distributions which are able to detect the aforementioned twin peaked structure and show that the world inc ome distribution starting with an unimodal structure in 1960 evolves subseq uently to a bimodal or twin-peak structure. This empirical results can be e xplained theoretically by a synergetic model based on the master equation a pproach as in in Pyka/Kruger/Cantner (1999). This paper attempts to extend this discussion by taking the reverse procedure, that is to find empirical evidence for the working mechanism of the theoretical model. We determine e mpirically the transition rates used in the synergetic approach by applying alternatively NLS to chosen functional forms and genetic programming in or der to determine the functional forms and the parameters simultaneously. Us ing the so determined transition rates in the synergetic model leads in bot h cases to the emergence of the bimodal distribution, which, however, is on ly in the latter case a persistent phenomenon.