A Thermodynamic Approach to Monetary Economics. An application to the UK Economy 1969-2006 and the USA Economy 1966-2006

John Bryant ()

Working Papers from Economic Consultancy, Vocat International

Abstract: This paper develops further monetary aspects of a model, first set out as part of a paper by the author, published in 2007, concerning the application of thermodynamic principles to economics. The model is backed up by statistical regression analysis of quarterly data of the UK and USA economies, with significant levels of correlation. The model sets out relationships between price, output volume, velocity of circulation and money supply, and develops an equation to measure entropy gain in an economic system, linked to interest rates, and thence to an equation for the yield of a money instrument.

Keywords: Monetary; thermodynamics; economics; entropy; interest rates; yield; money; UK economy (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba and nep-mac
Date: 2008-08
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Persistent link: http://EconPapers.repec.org/RePEc:voc:wpaper:ten52008

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