Thermodynamics of markets

S.A. Rashkovskiy

Physica A: Statistical Mechanics and its Applications, 2021, vol. 567, issue C

Abstract: 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 between the parameters of thermodynamic and economic systems (markets); in particular, each thermodynamic parameter can be associated with a certain economic parameter or indicator. The economic meaning of such primordial thermodynamic concepts as pressure, volume, internal energy, heat, etc. has been established. The thermostatistics of the market is considered. It is shown that, as in conventional thermostatistics, many market parameters, such as price of goods, quantity of goods, etc., as well as their fluctuations can be calculated formally using the partition function of an economic system.

Keywords: Econophysics; Economic system; First and second laws; Thermodynamic parameters of the economic system; Thermostatistics of the economic system (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:567:y:2021:i:c:s0378437120309973

DOI: 10.1016/j.physa.2020.125699

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