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We consider the thermodynamic approach to the description of economic systems and processes. The first and second laws of thermodynamics as applied to economic systems are derived and analyzed. It is shown that there is a deep analogy…

General Finance · Quantitative Finance 2021-02-03 Sergey Rashkovskiy

The maximum entropy principle (MEP) apparently allows us to derive, or justify, fundamental results of equilibrium statistical mechanics. Because of this, a school of thought considers the MEP as a powerful and elegant way to make…

Statistical Mechanics · Physics 2015-12-09 Gennaro Auletta , Lamberto Rondoni , Angelo Vulpiani

In this paper, we show how the MEP hypothesis may be used to build simple climate models without representing explicitly the energy transport by the atmosphere. The purpose is twofold. First, we assess the performance of the MEP hypothesis…

Atmospheric and Oceanic Physics · Physics 2017-03-21 Corentin Herbert , Didier Paillard

A thermodynamic approach to the description of economic systems and processes is developed. It is shown that there is a deep analogy between the parameters of thermodynamic and economic systems (markets); so each thermodynamic parameter can…

General Physics · Physics 2021-08-18 Sergey Rashkovskiy

The maximum entropy technique (MENT) is used to determine the distribution functions of physical values. MENT naturally combines required maximum entropy, the properties of a system and connection conditions in the form of restrictions…

High Energy Physics - Experiment · Physics 2007-05-23 B. Z. Belashev , M. K. Suleymanov

The paper present one of attempts to apply the thermodynamics laws to economics. Introducing common thermodynamic parameters and considering world economics as a one macrosystem, authors demonstrate the possible consequences of entropy…

Physics and Society · Physics 2008-07-03 A. M. Tishin , O. B. Baklitskaya

We formulate thermodynamics of economic systems in terms of an arbitrary probability distribution for a conserved economic quantity. As in statistical physics, thermodynamic macroeconomic variables emerge as the mean value of microeconomic…

Statistical Finance · Quantitative Finance 2011-05-26 H. Quevedo , M. N. Quevedo

Econophysics, is based on the premise that some ideas and methods from physics can be applied to economic situations. We intend to show in this paper how a physics concept such as entropy can be applied to an economic problem. In so doing,…

Statistical Finance · Quantitative Finance 2016-09-08 Adom Giffin

In this paper, we test predictions of a new theory of macroeconomics, called "thermal macroeconomics." The theory aims to apply the mathematical structure of classical thermodynamics, including analogues of temperature and entropy, to…

General Economics · Economics 2024-10-29 Yihang Luo , R. S. MacKay , Nick Chater

Concepts of everyday use like energy, heat, and temperature have acquired a precise meaning after the development of thermodynamics. Thermodynamics provides the basis for understanding how heat and work are related and with the general…

Statistical Mechanics · Physics 2007-05-23 D. Reguera , J. M. Rubi , J. M. G. Vilar

We consider demand-side economy. Using Caratheodory's approach, we define empirical existence of equation of state (EoS) and coordinates. We found new insights of thermodynamics EoS, the {\it effect structure}. Rules are proposed as…

General Economics · Economics 2021-11-19 Burin Gumjudpai

The Earth, like other planets with a relatively thick atmosphere, is not locally in radiative equilibrium and the transport of energy by the geophysical fluids (atmosphere and ocean) plays a fundamental role in determining its climate.…

Atmospheric and Oceanic Physics · Physics 2015-05-27 Corentin Herbert , Didier Paillard , Masa Kageyama , Berengere Dubrulle

Research on the birth and evolution of life are reviewed with reference to the maximum entropy production principle (MEPP). It has been shown that this principle is essential for consistent understanding of the birth and evolution of life.…

Biological Physics · Physics 2025-04-22 Yasuji Sawada , Yasukazu Daigaku , Kenji Toma

Recent theoretical progress in nonequilibrium thermodynamics, linking the physical principle of Maximum Entropy Production ("MEP") to the information-theoretical "MaxEnt" principle of scientific inference, together with conjectures from…

History and Philosophy of Physics · Physics 2015-06-26 Peter Martin

We present a new outlook on the climate system thermodynamics, studying some of its macroscopic properties in terms of the 1st and 2nd laws of thermodynamics. We review and clarify the notion of efficiency of the climate system by…

Atmospheric and Oceanic Physics · Physics 2011-10-11 Valerio Lucarini

This paper presents a conceptual model describing the medium and long-term co-evolution of natural and socio-economic subsystems of Earth. An economy is viewed as an out-of-equilibrium dissipative structure that can only be maintained with…

General Economics · Economics 2022-05-09 Éric Herbert , and Gael Giraud , Aurélie Louis-Napoléon , Christophe Goupil

The theory of thermal macroeconomics (TM) analyses economic phenomena within the mathematical framework of classical thermodynamics, using a set of axioms that apply to the purely macroscopic aspects of an economy [CM]. The theory shows…

General Economics · Economics 2026-03-12 Yihang Luo , Robert S. MacKay , Nick Chater

Nonlinear feedbacks in the Earth System provide mechanisms that can prove very useful in understanding complex dynamics with relatively simple concepts. For example, the temperature and the ice cover of the planet are linked in a positive…

Atmospheric and Oceanic Physics · Physics 2015-05-27 Corentin Herbert , Didier Paillard , Bérengère Dubrulle

The second law of thermodynamics implies a relationship between the net entropy export by the Earth and its internal irreversible entropy production. The application of this constraint for the purpose of understanding Earth's climate is…

Atmospheric and Oceanic Physics · Physics 2022-01-19 Martin S. Singh , Morgan E O'Neill

Maximum-entropy ensembles are key primitives in statistical mechanics from which thermodynamic properties can be derived. Over the decades, several approaches have been put forward in order to justify from minimal assumptions the use of…

Quantum Physics · Physics 2018-03-13 Paul Boes , Henrik Wilming , Jens Eisert , Rodrigo Gallego
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