Statistical mechanics of money

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  • 30 January 2000
Abstract
In a closed economic system, money is conserved. Thus, by analogy with energy, the equilibrium probability distribution of money must follow the exponential Gibbs law characterized by an effective "temperature" equal to the average amount of money per economic agent. We demonstrate how the Gibbs distribution emerges in computer simulations of various economic models. Then we consider a thermal machine, where the difference of temperatures allows to extract a monetary profit. We also discuss the role of debt and the models with broken time-reversal symmetry where the Gibbs law does not hold.

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