 Asset Dynamics and Dissipative Structures in Open Economies: Economics as a Prescription for the "Thermal Death" of EquilibriumMPRA Paper from University Library of Munich, Germany Abstract: This paper deepens the "Equilibrium Theory Endogenizing Imbalances" based on asset dynamics, as presented in the previous study (Kitamura, 2025), by incorporating concepts from thermodynamics and statistical mechanics. The objective is to bridge to a qualitative theory of development, encompassing issues such as the sustainability of economic growth and the creation of innovation. While the previous work proposed a model where imbalances are perpetuated through asset preference and capital diffusion, this study extends the framework into a model where "effective asset potential"—defined as the asset level divided by the rate of return on assets—acts as the driving force behind capital flows. It demonstrates a mechanism in which the capital efficiency of each nation significantly determines its economic trajectory. Consequently, this paper reveals that individual economies exist under a tension between "subjective equilibrium" aimed at utility maximization, and the "pressure of entropy increase" inherent in asset dynamics. Through observations using multilateral data, the global economy has polarized into "self-organizing economies" that concentrate and accumulate capital, and "diffusive economies" that primarily disperse and dissipate capital. This paper presents a novel perspective that views the global economy as a "dissipative structure" maintained through the interdependence of these distinct phases. Based on this analysis, the paper argues that for an economic system to remain sustainable, it is essential to maintain the gradient of asset potential within the system properly by eliminating "stagnation" through innovation and redistribution policies. Ultimately, this paper proposes that what economics terms "equilibrium" is equivalent to "thermal death" in physics; therefore, the goal of economics should be the avoidance rather than the realization of such a state, making the perspective of "entropy management". Keywords: Asset Dynamics; Economic Entropy; Effective Asset Potential; Coefficient of Capital Satiation; Dissipative Structure (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:127971 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.