Statistical thermodynamics of economic systems

TL;DR

This paper develops a thermodynamic framework for economic systems using probability distributions, enabling analysis of macroeconomic variables and phase transitions through statistical physics concepts.

Contribution

It introduces a thermodynamic approach to economics based on probability distributions, including examples with linear, nonlinear, and Pareto systems, and proposes phase transition analysis.

Findings

Thermodynamic variables derived from microeconomic distributions.

Partition function computation links micro and macro variables.

Phase transition formalism applied to economic changes.

Abstract

We formulate thermodynamics of economic systems in terms of an arbitrary probability distribution for a conserved economic quantity. As in statistical physics, thermodynamic macroeconomic variables emerge as the mean value of microeconomic variables and their determination is reduced to the computation of the partition function, starting from an arbitrary function. Explicit hypothetical examples are given which include linear and nonlinear economic systems, as well as multiplicative systems such as those dominated by a Pareto law distribution. We propose to use the formalism of phase transitions to study severe changes of macroeconomic variables.