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Elementary Principles in Statistical Economics

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Submitted:

13 December 2020

Posted:

14 December 2020

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Abstract
Economics has long sought to bridge the principles of microeconomics into the realm of macroeconomics. This paper presents a formal attempt to do so by using a maximum entropy based approach derived from statistical mechanics coupled with subjective game theory and elements from political philosophy. This approach is then applied to income distributions and to the Cobb-Douglas production function, to create a framework for future applications, and to illustrate where past work had made implicit assumptions regarding the system. The paper then explores the consequences of the approach, illustrating self-contradictions in the political philosophy of distributive justice, formally deriving an equation of state for the transactions on the Bitcoin network, and deriving from this the ideal gas law and polytropic process for an economy proving that expansionary monetary policy is not stimulative.
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Subject: Business, Economics and Management  -   Economics
Copyright: This open access article is published under a Creative Commons CC BY 4.0 license, which permit the free download, distribution, and reuse, provided that the author and preprint are cited in any reuse.
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