Macrostate Parameter and Investment Risk Diagrams for 2008 and 2009

TL;DR

This paper applies thermodynamic concepts like entropy and macrostate parameters to analyze investment risks and their evolution during Romania's 2008-2009 financial crisis, providing new risk assessment tools.

Contribution

It introduces the macrostate parameter and risk diagrams for financial markets, adapting thermodynamic principles to economic risk analysis during crises.

Findings

Risk diagrams for Romanian companies in 2008-2009 were calculated

The macrostate parameter evolution correlates with financial crisis periods

Thermodynamic concepts can effectively model economic risk dynamics

Abstract

In this paper are made some considerations of the application of phenomenological thermodynamics in risk analysis for the transaction on financial markets, using the concept of economic entropy and the macrostate parameter introduced by us in a previous works [15,16]. The investment risk diagrams for a number of Romanian listed companies in 2008 and 2009 years were calculed. Also, the evolution of the macrostate parameter during financial and economic crisis in Romania are studied.