From: Ian Wright (ian_paul_wright@HOTMAIL.COM)
Date: Tue Jun 10 2003 - 19:20:13 EDT
Hello Philip, I follow Duncan Foley's work quite closely, primarily because I think it is top notch. I tried to apply the approach he outlined in his paper, "A statistical equilibrium theory of markets" to the analytical analysis of my computational model, but found it too difficult, and instead I got away with something simpler, which was sufficient for my purposes. I must admit to not realising there is an important difference between thermodynamics and statistical mechanics (I perhaps erroneously lump it all together as statistical physics). I do not know what reversible near-equilibrium changes are. It's not a drawback that econophysics raises questions about possibile similarities between different systems (if this is your implication). Of course there are always specific differences, but I think that self-similarity of nature at all scales is ubiquitous, which is one explanation for the universality of much of mathematics, and even a rationale for the utility of scientific analogies. In my own work I found that at the equilibrium of a simple commodity economy the price distributions for different commodities have "temperatures" given by the monetary expression of labour time (M) multiplied by the labour value (L) of the commodity. That is, the probability of commodity i realising price k is given by: P(k)=(1/ML) * exp(-k/ML) The expectation of the price variate is simply ML, which is the average price of the commodity, and analogously the commodity's "temperature". In this case the average price is linearly proportional to the labour time necessary for the commodity's production. All the commodities in the system share the MEL, as the sectors are in statistical equilibrium, but are weighted by their interaction times, which are the sectoral labour values (longer production times, lower interaction frequencies). Situations in which different systems are in statistical equilibrium and therefore share temperature parameters are well studied in statistical physics, but I haven't followed this up. I must apologise that I haven't read your papers, but I have noted that you also employ statistical concepts and the MEL, so I should get round to it. -Ian. >Duncan Foley has written a paper applying thermodynamics to economics, >rather >than statistical mechanics >Classical thermodynamics and economic general equilibrium theory (with Eric >Smith) http://cepe.newschool.edu/~foleyd/econthermo.pdf > >It replaces Walrasiam initial endowments followed by adjustment to >equilibrium >with the thermodynamic concept of reversible near-equilibrium changes. The >analogue of temperature is different from that in "Statistical Mechanics of >Money". Econophysics raises questions like 'is capital analogous to heat, >or >whatever?' _________________________________________________________________ STOP MORE SPAM with the new MSN 8 and get 2 months FREE* http://join.msn.com/?page=features/junkmail
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