Consumption, Production, and Technological Progress: A Unified Entropic Approach
Author(s)
Dung, Tran Huu
Abstract
This paper proposes a framework in which the entropy of a system undergoing a transformation could be used to characterize the economics of the transformation itself. Specifically, two elemental economic processes – consumption and production – are each shown to have unique thermodynamic properties. Consumption is always accompanied by an increase in the entropy of the entire system, production by a decrease of the entropy of some parts of the system. Hence, an entropy measure could be designed to quantify in a unique physical sense the degree of economic production, consumption, and various sorts of efficiency. The study also suggests how this approach can provide insights into problems of economic growth and technological progress.
