Dear Stanley, Thank you very much for your comment: It is interesting that Carnot also > pointed out > that working harder / faster converted a greater portion of a > dissipated gradient into heat energy. When we > contextualize this > with the competition aspect of capitalism, we see that the > players > are invited to be less and less energy efficient. I did not pay attention to such a consequence of Carnot's considerations. I shall try incorporate this point in my model.
I also would like to emphasize the role of mass-media in my model: it is the main "cooling power" acting at the financial market. So, the model is really purely informational. It seems that mass-media anticipates the real crises. I can illustrate this by the present situation in Russia. In fact, it was not easy to find a sign of comming crises, economics did extremely well, people have money, they consume a lot, really a lot. But it was mass-media who started to cry about crises, banks started to act in such a way ( I have a few friends , former scientists who became owners of Russian banks, they tell that they used the situation of declared crises to postpond some payments...) Ironically, people still do not follow mass-media and comsume a lot, but it is clear that finally the crises will be created. All the best, Andrei Yours, Andrei > > > > Dear John, > > > >In majority of discussions the financial crises is considered > as a > >disaster, as well as all > >previous crises. Each time when a new crises demonstrates its > power. > >people are surprised > >that it happened again (and again and it will definitely happen > >again). However, the cyclic character > >of crashes of the financial market may induce the impression > that > >these crasches are of > >objective nature. Moreover, it seems that they are really > nessasary > >for successful functioning > >of the financial market. I elaborated this trivial observation > in a > >phemenological thermodynamical model > >of functioning of the financial market, as a Carnot cycle for > Heat > >Machine. By this model the financial market is not able to > >start a new cycle without crash in the same way as Heat Machine > >could not start a new cycle without cooling, see more detail > ><http://arxiv.org/abs/cond- > mat/0408560>http://arxiv.org/abs/cond-mat/0408560 > > > >The model is in fact purely informational, it is about dynamics > of > >expectations (in this aspect it is close to ideas of G. Soros) > > Yes. He discusses it in > detail in his book "The Crisis of > Global Capitalism". It is interesting that Carnot also > pointed out > that working harder / faster converted a greater portion of a > dissipated gradient into heat energy. When we > contextualize this > with the competition aspect of capitalism, we see that the > players > are invited to be less and less energy efficient. WE can > then also > note: > > Chaisson, E.J., 2008. Long-term global heating from energy > usage. > Eos, Transactions of the American Geophysical Union 89: 353-255. > > and we find that we would destroy our environment even if we did > not > produce greenhouse gases. > > STAN > > > > Andrei Khrennikov, professor of applied mathematics, director of International center for mathematical modeling in physics, engineering and cognitive science, University of Vaxjo, Sweden
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