Article ID Journal Published Year Pages File Type
979025 Physica A: Statistical Mechanics and its Applications 2010 12 Pages PDF
Abstract

Economic growth depends on capital and labor and two-dimensional calculus has been applied to economic theory. This leads to Riemann and Stokes integrals and to the first and second laws of production and growth. The mathematical structure is the same as in thermodynamics, economic properties may be related to physical terms: capital to energy, production to physical work, GDP per capita to temperature, production function to entropy. This is called econophysics. Production, trade and banking may be compared to motors, heat pumps or refrigerators. The Carnot process of the first law creates two levels in each system: cold and hot in physics; buyer and seller, investor and saver, rich and poor in economics. The efficiency rises with the income difference of rich and poor. The results of econophysics are compared to neoclassical theory.

Related Topics
Physical Sciences and Engineering Mathematics Mathematical Physics
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