Arroyo-Colón, Luis Balbino

Publication Search Results

Now showing 1 - 1 of 1

A thermal model of the Economy
(2010) Arroyo-Colón, Luis Balbino; Jiménez-González, Héctor J.; College of Arts and Science - Science; Roura-Davila, Erick; Alameda-Lozada, José I.; Marrero-Soto, Pablo J.; Department of Physics; Sharma, Anand D.
The motivation for this work came from an interest in Economics (particularly since the 2008 economic downturn) and a desire to use the tools of physics in a field that has not been the subject of great exploration. We propose a model of economics in analogy to thermodynamics and introduce the concept of the Value Multiplier as a fundamental addition to any such model. Firstly, we attempt to make analogies between some economic concepts and fundamental concepts of thermal physics. Then we introduce the value multiplier and justify its existence in our system; the value multiplier allows us to account for some intangible, psychological elements of the value of goods and services. We finally bring all the elements together in a qualitative system. In particular, we attempt to make an analogy with the Keynesian Multiplier that justifies the usefulness of fiscal stimulus in severe economic downturns.