Tests of thermal macroeconomic theory on simulated microeconomies
In this paper, we test predictions of a new theory of macroeconomics, called ‘thermal macroeconomics.’ The theory aims to apply the mathematical structure of classical thermodynamics, including analogues of temperature and entropy, to predict aspects of the aggregate behaviour of populations of econ...
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| Format: | Article |
| Language: | English |
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IOP Publishing
2025-01-01
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| Series: | Journal of Physics: Complexity |
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| Online Access: | https://doi.org/10.1088/2632-072X/adac99 |
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| _version_ | 1832576037731434496 |
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| author | Yihang Luo R S MacKay Nick Chater |
| author_facet | Yihang Luo R S MacKay Nick Chater |
| author_sort | Yihang Luo |
| collection | DOAJ |
| description | In this paper, we test predictions of a new theory of macroeconomics, called ‘thermal macroeconomics.’ The theory aims to apply the mathematical structure of classical thermodynamics, including analogues of temperature and entropy, to predict aspects of the aggregate behaviour of populations of economic agents without analysing their detailed interactions. We test the theory by comparing its predictions with the behaviour of a variety of simulated micro-economies in which goods and money can be exchanged between agents, confirming the predictions of the theory. The paper serves also to illustrate and make more tangible the predictions of thermal macroeconomics. |
| format | Article |
| id | doaj-art-28d69bc0c5a64dd48026807459983734 |
| institution | Kabale University |
| issn | 2632-072X |
| language | English |
| publishDate | 2025-01-01 |
| publisher | IOP Publishing |
| record_format | Article |
| series | Journal of Physics: Complexity |
| spelling | doaj-art-28d69bc0c5a64dd480268074599837342025-01-31T13:23:45ZengIOP PublishingJournal of Physics: Complexity2632-072X2025-01-016101500810.1088/2632-072X/adac99Tests of thermal macroeconomic theory on simulated microeconomiesYihang Luo0https://orcid.org/0009-0005-8818-2420R S MacKay1https://orcid.org/0000-0003-4771-3692Nick Chater2https://orcid.org/0000-0002-9745-0686Warwick Business School, University of Warwick , Coventry CV4 7AL, United KingdomMathematics Institute, University of Warwick , Coventry CV4 7AL, United KingdomBehavioural Science Group, Warwick Business School, University of Warwick , Coventry CV4 7AL, United KingdomIn this paper, we test predictions of a new theory of macroeconomics, called ‘thermal macroeconomics.’ The theory aims to apply the mathematical structure of classical thermodynamics, including analogues of temperature and entropy, to predict aspects of the aggregate behaviour of populations of economic agents without analysing their detailed interactions. We test the theory by comparing its predictions with the behaviour of a variety of simulated micro-economies in which goods and money can be exchanged between agents, confirming the predictions of the theory. The paper serves also to illustrate and make more tangible the predictions of thermal macroeconomics.https://doi.org/10.1088/2632-072X/adac99thermal macroeconomicsagent-based simulationCarnot cycleflexibility matrixOnsager matrixtrade |
| spellingShingle | Yihang Luo R S MacKay Nick Chater Tests of thermal macroeconomic theory on simulated microeconomies Journal of Physics: Complexity thermal macroeconomics agent-based simulation Carnot cycle flexibility matrix Onsager matrix trade |
| title | Tests of thermal macroeconomic theory on simulated microeconomies |
| title_full | Tests of thermal macroeconomic theory on simulated microeconomies |
| title_fullStr | Tests of thermal macroeconomic theory on simulated microeconomies |
| title_full_unstemmed | Tests of thermal macroeconomic theory on simulated microeconomies |
| title_short | Tests of thermal macroeconomic theory on simulated microeconomies |
| title_sort | tests of thermal macroeconomic theory on simulated microeconomies |
| topic | thermal macroeconomics agent-based simulation Carnot cycle flexibility matrix Onsager matrix trade |
| url | https://doi.org/10.1088/2632-072X/adac99 |
| work_keys_str_mv | AT yihangluo testsofthermalmacroeconomictheoryonsimulatedmicroeconomies AT rsmackay testsofthermalmacroeconomictheoryonsimulatedmicroeconomies AT nickchater testsofthermalmacroeconomictheoryonsimulatedmicroeconomies |