The Role of Temperature in Economic Exchange - An Empirical Analysis

Bojan Dimitrijević () and Ivan Lovre ()
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Bojan Dimitrijević: Faculty of Business in Service, EDUCONS University
Ivan Lovre: Faculty of Business in Service, EDUCONS University

Journal of Central Banking Theory and Practice, 2015, vol. 4, issue 3, 65-89

Abstract: As a synthesis of economics and physics and an attempt to apply the methods and models of statistical physics to economics, econophysics is presently a new, growing and very dynamic branch of modern science. Therefore, the subject of this paper is to analyse the relationship and interdependence between thermodynamics and economics, and it aims to show similarities, analogies and correspondence between the main categories, methods and models of thermodynamics on one hand, and economics on the other. The paper analyses the relation between economics and thermodynamics, as well as the probability distribution in the kinetic theory of gases corresponding to money, income and wealth distribution, connects entropy with utility and the principle of operation of the thermal engine with economic exchange. The final part of the paper empirically analyzes temperature differences in the exchange between Serbia and the selected EU countries. There are differences in temperature between Serbia and the group of selected countries. Results of the empirical analysis shows that the exchange between countries is based on principles of thermodynamics and that developed countries generate more profits and benefits from exchange.

Keywords: econophysics; thermodynamics; thermal machine; entropy; utility; the quantity theory of money (search for similar items in EconPapers)
JEL-codes: A12 C99 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cbk:journl:v:4:y:2015:i:3:p:65-89

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