Statistical mechanics of money

Adrian Dragulescu and Victor Yakovenko

Papers from arXiv.org

Abstract: In a closed economic system, money is conserved. Thus, by analogy with energy, the equilibrium probability distribution of money must follow the exponential Gibbs law characterized by an effective temperature equal to the average amount of money per economic agent. We demonstrate how the Gibbs distribution emerges in computer simulations of economic models. Then we consider a thermal machine, in which the difference of temperatures allows one to extract a monetary profit. We also discuss the role of debt, and models with broken time-reversal symmetry for which the Gibbs law does not hold.

Date: 2000-01, Revised 2000-08
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Published in Eur. Phys. J. B 17, 723 (2000)

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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:cond-mat/0001432

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