Related papers: Financial heat machine
Financial models do not merely analyse markets, but actively shape them. This effect, known as performativity, describes how financial theories and the subsequent actions based on them influence market processes, by creating self-fulfilling…
We describe a financial market model which shows a non-equilibrium phase transition. Near the transition punctuated equilibrium behaviour is seen, with avalanches occuring on all scales. This scaling is described by an exponent very near 1.…
We employ the recently developed framework of the energetics of stochastic processes (called `stochastic energetics'), to re-analyze the Carnot cycle in detail, taking account of fluctuations, without taking the thermodynamic limit. We find…
Two recent topics on a formal thermodynamic analogy of intracellular diffusivity fluctuations observed experimentally in normal/anomalous diffusion are reported. Not only the analogs of the quantity of heat and work as well as the internal…
We develop a financial market model in which a large population of firms chooses dynamic emission strategies under climate transition risk, interacting with both environmentally concerned and neutral investors. Firms face a trade-off…
The modelling of financial markets presents a problem which is both theoretically challenging and practically important. The theoretical aspects concern the issue of market efficiency which may even have political implications…
This paper examines the impact of climate shocks on 13 European economies analysing jointly business and financial cycles, in different phases and disentangling the effects for different sector channels. A Bayesian Panel Markov-switching…
We define a financial bubble as a period of unsustainable growth, when the price of an asset increases ever more quickly, in a series of accelerating phases of corrections and rebounds. More technically, during a bubble phase, the price…
From the steam engine to current nano-devices, the design of efficient thermal machines has been instrumental in modern societies. In its essence a thermal engine can be thought as a working substance, in contact with two or more baths,…
The mechanism of thermal inflation, a relatively short period of accelerated expansion after primordial inflation, is a desirable ingredient for a certain class of particle physics models if they are not to be in contention with the…
This study presents a computational and theoretical framework inspired by thermodynamic principles to analyze the dynamics of economic inflation within adiabatic and non-adiabatic systems. In a framework referred to as developmental…
We present a simple continuous-time model of clearing in financial networks. Financial firms are represented as "tanks" filled with fluid (money), flowing in and out. Once "pipes" connecting "tanks" are open, the system reaches the clearing…
It is well known that the Friedmann-Robertson-Walker (FRW) universe is a dynamical spacetime, and it has thermodynamics embodied on the apparent horizon. Notably, it also possesses a van der Waals-like equation of state, enabling us to…
The autonomous heat engine is a model system of autonomous nonequilibrium systems like biological cells, exploiting nonequilibrium flow for operations. As the Carnot engine has essentially contributed to the equilibrium thermodynamics,…
Similarity between quantum mechanics and thermodynamics is discussed. It is found that if the Clausius equality is imposed on the Shannon entropy and the analogue of the heat quantity, then the value of the Shannon entropy comes to formally…
A dynamical price formation model for financial assets is presented. It aims to capture the essence of speculative trading where mispricings of assets are used to make profits. It is shown that together with the incorporation of the concept…
Systemic risk is a rapidly developing area of research. Classical financial models often do not adequately reflect the phenomena of bubbles, crises, and transitions between them during credit cycles. To study very improbable events,…
We argue that thermal machines can be understood from the perspective of `virtual qubits' at `virtual temperatures': The relevant way to view the two heat baths which drive a thermal machine is as a composite system. Virtual qubits are…
The application of principles of thermodynamics and statistical mechanics to economic systems is considered in a broad historical perspective, extending from prehistoric times to the present day. The hypothesis of maximum entropy production…
We model a microscopic heat engine as a particle hopping on a one-dimensional lattice in a periodic sawtooth potential, with or without load, assisted by the thermal kicks it gets from alternately placed hot and cold thermal baths. We find…