Overview In 1995, Italian economist Emanuele Sella was using the term "economic temperature". [1] In Sella's model, in his research on the effects of spreading of competition, he strove to find a generic measure of “economic conditions” and “value” in place of the standard economic units of money, work, grain, land, and utility, commonly used by economists. In this direction, Sella adopted what he called “an ideal measurement, in terms of economic temperature”, using the following two postulates:
Each organism has its own thermoeconomic degree comparable to that of any other organism in time and space; this property of the organism is defined as economic temperature.
The economic temperature of an organism depends on the means which it possess (or, in a certain sense, its ‘wealth’); on its capacity to absorb these means (that is to say, in a certain sense, on its ‘need for wealth’).
In using these postulates, Sella intends to supersede the problem of the measurement of value: “it is clear … that one can appreciate the economic temperature of an organism also as a specific value of this organism”. He suggests, however, that “it is advisable not to utilize the term value, which is too closely linked to statics.” [1]
In 1997, Sergei Darda, in his “Entropy and Economy”, offered new definition of economic temperature, applying the concept to work of a business that generates income by producing and selling some products or services, wherein economic temperature defined as equilibrium cost and equilibrium price for producing and selling a product or a service. [3]
In 2009, Americans engineer Arthur Jonath and psychologist Richard Goldwater developed a crude economic temperature scale in what they called ‘degrees Greenspan’, named after former federal reserve chairman Alan Greenspan who described the dot com era as being in a state of ‘irrational exuberance (or 7˚G). [2] The reason that just as heat excites molecules, increasing pressure in a container, so to will desire heat up people, and put pressure on behavior.
References 1. Erreygers, Guido. (2001). Economics and Interdisciplinary Exchange, (pg. 160-163). Routledge. 2. Goldwater, Richard and Jonath, Arthur. (2009). “Saving Capitalism from Finance: the Power of Thermoeconomics.” 27-pgs. ProfitandEntropy.com.
