The author develops analogies between economic systems and thermodynamics, and shows how economic quantities can characterize the state of an economic system in equilibrium. We argue that just as a physical system in thermodynamic equilibrium requires a nonmechanical variable (the temperature) to specify its state, so does an economic system. In addition, both systems must have a corresponding conjugate quantity, the entropy. We also develop economic analogies to the free energy, Maxwell relations, and the Gibbs–Duhem relation. Assuming that economic utility can be measured, we develop an operational definition of an economic temperature scale. We also develop an analogy to statistical mechanics, which leads to Gaussian fluctuations.
%0 Journal Article %A Saslow, Wayne %D December 1, 1999 %T An economic analogy to thermodynamics %J Am. J. Phys. %V 67 %N 12 %P 1239-1247 %8 December 1, 1999 %@ 0002-9505 %U https://doi.org/10.1119/1.19110
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