  Empirical distributions of wealth and income can be reproduced using
simplified agent-based models of economic interactions, analogous to
microscopic collisions of gas particles. Building upon these models of freely
interacting agents, we explore the effect of a segregated economic network in
which interactions are restricted to those between agents of similar wealth.
Agents on a 2D lattice undergo kinetic exchanges with their nearest neighbours,
while continuously switching places to minimize local wealth differences. A
spatial concentration of wealth leads to a steady state with increased global
inequality and a magnified distinction between local and global measures of
combatting poverty. Individual saving propensity proves ineffective in the
segregated economy, while redistributive taxation transcends the spatial
inhomogeneity and greatly reduces inequality. Adding fluctuations to the
segregation dynamics, we observe a sharp phase transition to lower inequality
at a critical temperature, accompanied by a sudden change in the distribution
of the wealthy elite.
