THERMOECONOMICS - Vocat International Ltd
THERMOECONOMICS - Vocat International Ltd THERMOECONOMICS - Vocat International Ltd
20 Copyright: John Bryant, VOCAT International Ltd 2012, for personal use only. coefficient ω for the UK economy of 0.65 and for the USA of 0.55, and by reference to annualised 4-quarter moving average percent rates of change in the index of trading value (velocity of circulation) dT/T and in output volume dV/V. The assumed values of ω [UK 0.65, USA 0.55] were estimated by reference to the inverse of the mean values of the velocities of circulation for the UK (M4) of 1.52 and for the USA (M2) of 1.82, measured over the periods in the charts [The mean figure of velocity of circulation for the USA on an M3 basis to 2006 calculates at 1.49, suggesting a value of ω on that basis of 0.67]. No account of any technical changes over time has been made, that might improve the results obtained. Figure 5.10 Money entropy change ds for assumed values of value capacity coefficient ω
Copyright: John Bryant, VOCAT International Ltd 2012, for personal use only. and by reference to changes in output volume V and velocity of circulation T. It can be seen that money entropy change tends to go negative when volume change declines, and to increase when volume change goes up. It also tends to flow with change in velocity of circulation as that includes both volume and price changes. In addition, it will be noted that quite often when output volume change is positive then velocity change is negative. The two measures of money entropy change at equations (5.13) and (5.15) take this difference into account, in that the entropic index factors in front of dT/T and dV/V are different in construction. Readers will note, however, that mathematical manipulation of each of these factors, still produces the result for nil entropy change of n = γ = (1+ω)/ω. From figure 5.10, if the two economies had been operating at near isentropic conditions, it might be expected that there would be little ebb and flow of ds about the zero line. Clearly this has not been the case, illustrated also by the significant variation in the elastic index n at figure 5.7. The fact that incremental entropy change ds tends to oscillate plus or minus either side of a minimum or zero level, however, suggests that the economic system endeavours to maximise or minimise entropy potential s in some fashion. This observation will be returned to later in this chapter. By combining the charts at figures 5.7 for the elastic index, and the charts at figure 5.10 for the money entropy change, it will be noted that entropy change tends to go negative or downwards where the elastic index swings wildly. This effect appears also to occur when an increase in interest rates has occurred. Figure 5.11 sets out charts illustrating this effect. Thus at equation (5.13) the entropic index is reduced to a low or even a negative value. The net effect on the money entropy change, however, depends upon whether changes in velocity of circulation are moving up or down, with a switchback occurring at about the zero point. Thus the position is complex. The charts of the elastic index at figure 5.11 show strategic points for both the UK and USA economies where the switchback effect occurred. An explanation for this effect is given at figure 5.12, which sets out the locus of nil entropy change n = γ = (1+ω)/ω. It can be seen that large movements in the elastic index n occur if the curve of nil entropy gain is shifted to the left or to the right, effectively shortening or lengthening the apparent lifetime embedded in the value capacity coefficient. A further explanation, alluded to earlier in this chapter, is that volume change dV/V is 21
- Page 1 and 2: THERMOECONOMICS A Thermodynamic App
- Page 3 and 4: Contents Preface 1 Introduction 1 1
- Page 5 and 6: Preface This book, first published
- Page 7 and 8: Copyright: John Bryant, VOCAT Inter
- Page 9 and 10: Copyright: John Bryant, VOCAT Inter
- Page 11 and 12: Copyright: John Bryant, VOCAT Inter
- Page 13 and 14: Copyright: John Bryant, VOCAT Inter
- Page 15 and 16: Copyright: John Bryant, VOCAT Inter
- Page 17 and 18: Copyright: John Bryant, VOCAT Inter
- Page 19 and 20: Copyright: John Bryant, VOCAT Inter
- Page 21 and 22: Copyright: John Bryant, VOCAT Inter
- Page 23 and 24: Copyright: John Bryant, VOCAT Inter
- Page 25: Copyright: John Bryant, VOCAT Inter
- Page 29 and 30: Copyright: John Bryant, VOCAT Inter
- Page 31 and 32: Copyright: John Bryant, VOCAT Inter
- Page 33 and 34: Copyright: John Bryant, VOCAT Inter
- Page 35 and 36: Copyright: John Bryant, VOCAT Inter
- Page 37 and 38: Copyright: John Bryant, VOCAT Inter
- Page 39 and 40: Copyright: John Bryant, VOCAT Inter
- Page 41 and 42: Copyright: John Bryant, VOCAT Inter
- Page 43 and 44: Copyright: John Bryant, VOCAT Inter
- Page 45 and 46: Copyright: John Bryant, VOCAT Inter
- Page 47 and 48: Copyright: John Bryant, VOCAT Inter
- Page 49 and 50: INDEX Copyright: John Bryant, VOCAT
- Page 51: Copyright: John Bryant, VOCAT Inter
20<br />
Copyright: John Bryant, VOCAT <strong>International</strong> <strong>Ltd</strong> 2012, for personal use only.<br />
coefficient ω for the UK economy of 0.65 and for the USA of 0.55, and by<br />
reference to annualised 4-quarter moving average percent rates of change in<br />
the index of trading value (velocity of circulation) dT/T and in output<br />
volume dV/V.<br />
The assumed values of ω [UK 0.65, USA 0.55] were estimated by reference<br />
to the inverse of the mean values of the velocities of circulation for the UK<br />
(M4) of 1.52 and for the USA (M2) of 1.82, measured over the periods in<br />
the charts [The mean figure of velocity of circulation for the USA on an M3 basis to<br />
2006 calculates at 1.49, suggesting a value of ω on that basis of 0.67]. No account<br />
of any technical changes over time has been made, that might improve the<br />
results obtained.<br />
Figure 5.10 Money entropy change ds for assumed values of value capacity coefficient ω
Change language