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The Role of Temperature in Economic Exchange - An Empirical Analysis

Author

Listed:
  • Bojan Dimitrijević

    (Faculty of Business in Service, EDUCONS University)

  • Ivan Lovre

    (Faculty of Business in Service, EDUCONS University)

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.

Suggested Citation

  • Bojan Dimitrijević & Ivan Lovre, 2015. "The Role of Temperature in Economic Exchange - An Empirical Analysis," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 4(3), pages 65-89.
    • Handle: RePEc:cbk:journl:v:4:y:2015:i:3:p:65-89
    as

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    File URL: http://www.cbcg.me/repec/cbk/journl/vol4no3-2.pdf
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    References listed on IDEAS

    as
    1. John Bryant, 2010. "A Thermodynamic Approach to Monetary Economics. A Revision. An application to the UK Economy 1969-2006 and the USA Economy 1966-2006," Working Papers ten5a2010, Economic Consultancy, Vocat International.
    2. repec:cbk:journl:v:1:y:2013:i:3:p:111-138 is not listed on IDEAS
    3. Christophe Schinckus, 2011. "What can econophysics contribute to financial economics?," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 58(2), pages 147-163, June.
    4. Eugene F. Fama, 1965. "Portfolio Analysis in a Stable Paretian Market," Management Science, INFORMS, vol. 11(3), pages 404-419, January.
    5. Bojan Dimitrijević & Ivan Lovre, 2013. "Essay on Monetary Policy and Economic Growth," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 2(1), pages 111-138.
    6. Gingras, Y. & Schinckus, C., 2012. "The Institutionalization Of Econophysics In The Shadow Of Physics," Journal of the History of Economic Thought, Cambridge University Press, vol. 34(1), pages 109-130, March.
    7. John Bryant, 2012. "Thermoeconomics - A Thermodynamic Approach to Economics (Third edition)," Books, Economic Consultancy, Vocat International, edition 0, number tebp2012, July.
    8. Victor M. Yakovenko & J. Barkley Rosser, 2009. "Colloquium: Statistical mechanics of money, wealth, and income," Papers 0905.1518, arXiv.org, revised Dec 2009.
    Full references (including those not matched with items on IDEAS)

    Citations

    RePEc Biblio mentions

    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Schools of Economic Thought, Epistemology of Economics > Heterodox Approaches > Thermoeconomics

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    More about this item

    Keywords

    econophysics; thermodynamics; thermal machine; entropy; utility; the quantity theory of money;
    All these keywords.

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • C99 - Mathematical and Quantitative Methods - - Design of Experiments - - - Other

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