Looking at Economics through the Eyes of Thermodynamics

Vítor A. F. Costa ()
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Vítor A. F. Costa: TEMA—Centro de Tecnologia Mecânica e Automação, Departamento de Engenharia Mecânica, Universidade de Aveiro, Campus Universitário de Santiago, 3810-193 Aveiro, Portugal

Energies, 2024, vol. 17, issue 11, 1-41

Abstract: Based on Thermodynamics and its well-established First and Second Laws, this work presents and explores their economics counterparts, introducing new concepts, variables, and equations. This includes, among others, the economic counterparts of temperature, reversibility and irreversibility, and entropy and entropy generation resulting from economic irreversibility. The meaning of the new concepts, variables, equations, and their messages are introduced and discussed considering simple yet relevant economic processes. The economic counterparts of the First and Second Law balance equations are set in addition to the base concepts and Laws. These are effective and valuable tools for the analysis of economic processes. Observations from selected economic activities are analyzed using the new concepts, variables, and equations.

Keywords: thermodynamics laws; economics; economic irreversibility; economic entropy; economic entropy generation (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2024
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