Econophysics, Thermoeconomics and Phynance

Annals of the New York Academy of Sciences, 2010

Almost 40 years have passed since Georgescu-Roegen's seminal work, The Entropy Law and the Economic Process. During this time there has been much debate on the relevance of thermodynamics to economics, and many attempts to build bridges between the two. There has also been much confusion as to what the laws of thermodynamics actually say. This article clearly explains heat, work, and the thermodynamic laws, the meaning of entropy, and the importance of kinetics as a barrier to thermodynamically favorable processes. The two most important misunderstandings in the literature, namely entropy as disorder, and entropy as a measure of information, are highlighted. Reviewing the literature shows that thermodynamics is most relevant for building a descriptive model, or preanalytic vision of economics, because it implies physical constraints on production and consumption. Similarly, it suggests that there may be serious flaws with neoclassical economic models, and in particular the primacy of sustained growth. However, thermodynamics does not seem to aid mathematical modeling in economics, nor does it provide normative insights. As an aid to energy policy, thermodynamics is useful for assessing the feasibility of technology optionsthose that have the potential to meet our goals, and should be counted as options, and those that should not. But it does not provide a prescription outside of this technical realm. Factors, such as environmental impact, cost, and social acceptability, will ultimately determine which technically feasible options are most desirable.

Asociacin Argentina de Economa Poltica-XXX …, 2007

International Journal of Exergy, 2007

An analogy between thermodynamic and economic theories and processes is developed further, following a previous paper published by the author in 1982. Economic equivalents are set out concerning the ideal gas equation, the gas constant, pressure, temperature, entropy, work done, specific heat and the 1 st and 2 nd Laws of Thermodynamics. The law of diminishing marginal utility was derived from thermodynamic first principles. Conditions are set out concerning the relationship of economic processes to entropic gain. A link between the Le Chatelier principle and economic processes is developed, culminating in a derivation of an equation similar in format to that of Cobb Douglas production function, but with an equilibrium constant and a disequilibrium function added to it. A trade cycle is constructed, utilising thermodynamic processes, and equations are derived for cycle efficiency, growth and entropy gain. A thermodynamic model of a money system is set out, and an attempt is made to relate interest rates, the rate of return, money demand and the velocity of circulation to entropy gain. Aspects concerning the measurement of economic value in thermodynamic terms are discussed.

International Journal of Accounting and Economics Studies, 2021

So far, economics does not have a coherent theory. This condition is a consequence of the ambiguity of basic categories such as capital, labor, money, and consumption. In the traditional narrative, these categories do not have a strict scientific meaning. This situation is positively changed by the inclusion of the fundamental principles of thermodynamics, especially the famous second principle. This is the main hypothesis argued in the body of the article. The consistent use of thermodynamics made it possible to reinterpret the system of fundamental concepts, as well as to solve cognitive problems in the field of capital and labor theory and sources of profit. The results of the presented empirical research indicate the consistency of the modified economic theory.  Â

International journal of productivity management and assessment technologies, 2019

Thefuturecontainsterms(V)thatarevalidatalltimes,andterms(U)thatarepresentlyunknown. Ineconomics,(V)and(U)correspondtoexanteandexpost,inphysicstoconservativeandnot conservative,incalculus,toexactandnotexactdifferentialformsortoRiemannandStokesintegrals, andtolinearornon-linearequations,instatisticstorealandprobableterms.Apparently,theauthors mayrepresentthe(V)and(U)structureineconomicsandphysicsbycalculus,probabilitytheory,by non-linearity,andchaostheory.ThepresentpaperappliesStokesintegralstodoubleentryaccounting. The resulting laws replace neoclassical theory and correspond to the first and second laws of thermodynamics.Economicsandphysicshavethesamestructure,leadingtothenameeconophysics. Productionisatwolevelcyclewithcheapproduction,expensivesales,correspondingtotheCarnot cycleofamotorwithcoldairandhotexhaust.Inarunningmotor,efficiency,thedifferencebetween hotandcold,becomesalwayshigher.Inaneconomythegapbetweenrichandpooralwaysrises.

During this time there has been much debate on the relevance of thermodynamics to economics, and many attempts to build bridges between the two. There has also been much confusion as to what the laws of thermodynamics actually say. This article clearly explains heat, work, and the thermodynamic laws, the meaning of entropy, and the importance of kinetics as a barrier to thermodynamically favorable processes. The two most important misunderstandings in the literature, namely entropy as disorder, and entropy as a measure of information, are highlighted. Reviewing the literature shows that thermodynamics is most relevant for building a descriptive model, or preanalytic vision of economics, because it implies physical constraints on production and consumption. Similarly, it suggests that there may be serious flaws with neoclassical economic models, and in particular the primacy of sustained growth. However, thermodynamics does not seem to aid mathematical modeling in economics, nor does it provide normative insights. As an aid to energy policy, thermodynamics is useful for assessing the feasibility of technology optionsthose that have the potential to meet our goals, and should be counted as options, and those that should not. But it does not provide a prescription outside of this technical realm. Factors, such as environmental impact, cost, and social acceptability, will ultimately determine which technically feasible options are most desirable.

s Thermodynamics is a phenomenological science that derives its concepts directly from observation and experiment. The laws of thermodynamics can be considered as axioms of a mathematical model, and the fact that they are based upon commonplace observations makes them tremendously powerful and generally valid. In particular, the interest of applying thermodynamics in a systematic manner to describe the behavior of economic and financial systems has a long history [29]. In this paper we set out the first and second laws of Thermodynamics, which are fundamentals in the world of physics, and we examine the dynamics of the main processes encountered as applied to economic systems. And also we construct the mathematical model for constant pries process. And finally this paper end with conclusion.

The thermodynamic formulation of economics is based on the laws of calculus. Differential forms in two dimensions are generally not exact forms (δQ), the integral from (A) to (B) is not always the same as the integral from (B) to (A). It is possible to invest little in one way and gain a lot on the way back, and to do this periodically. This is the mechanism of energy production in heat pumps, of economic production in companies and of growth in economies. Not exact forms may be turned into exact forms (dS) by an integrating factor T, dS = δQ/T. The new function (S) is called entropy and is related to the probability (P) as S = ln P. In economics the function (S) is called production function. The factor (T) is a market index or the standard of living, GNP/capita, of countries. The dynamics of economic growth is based on the Carnot process, which is driven by external resources. Economic growth and capital generation-like heat pumps and electric generators-depend on natural resources like oil. GNP and oil consumption run parallel for all countries. Markets and motors, economic and thermodynamics processes are all based on the same laws of calculus and statistics.

Archives Des Sciences, 2012

By reviewing history of economic thoughts clearly see that this science, especially from the time that mathematic involved in it face an impressive change in content, some of economists were against it and started to restrict it and some others were agree with that and tried to study capability of it is able to use maximum capability of math tools to improve economic goals. Despite that concept of Econophysics officially studied in 1995 in an international conference and so many investigation implement in recent year in the developed countries to the usage of math and especially physics methods in economic science which brief called Econophysics, shows that, roots of this topics dates back to keys and famous theory, him general their "money, interest and employment" and resemblance of it to Einstein general theory. Econophysics is importance topic which officially attention in 1990, so that in period of one decade various studies especially by physicist in developed countries implemented. Despite that Economist interaction with that topic and usage of physics science methods was sometimes disturbing but in research topic will be continue. By consideration of importance of research topic try to be in spite of Econophysics concept introduction of history of it and also connection of physic and economic science, usage of it analysis and resolution.

The thermodynamic formulation of economics is based on the laws of calculus. Differential forms in two dimensions are generally not exact forms (δQ), the integral from (A) to (B) is not always the same as the integral from (B) to (A). It is possible to invest little in one way and gain a lot on the way back, and to do this periodically. This is the mechanism of energy production in heat pumps, of economic production in companies and of growth in economies. Not exact forms may be turned into exact forms (dS) by an integrating factor T, dS = δQ/T. The new function (S) is called entropy and is related to the probability (P) as S = ln P. In economics the function (S) is called production function. The factor (T) is a market index or the standard of living, GNP/capita, of countries. The dynamics of economic growth is based on the Carnot process, which is driven by external resources. Economic growth and capital generation-like heat pumps and electric generators-depend on natural resources like oil. GNP and oil consumption run parallel for all countries. Markets and motors, economic and thermodynamics processes are all based on the same laws of calculus and statistics.