|A frame from the probably-never-to-see-the-light-of-day video introduction to information transfer economics. Additionally, this is probably not an accurate depiction of Fielitz and Borchardt. Graphics borrowed from here.
Information theory provides shortcuts which allow to deal with complex systems. The basic idea one uses for this purpose is the maximum entropy principle developed by Jaynes. However, an extensions of this maximum entropy principle to systems far from thermal equilibrium or even to non-physical systems is problematic because it requires an adequate choice of constraints. In this paper we apply the information theory in an even more abstract way and propose an information transfer model of natural processes which does not require any choice of adequate constraints. It is, therefore, directly applicable to systems far from thermal equilibrium and to non-physical systems/processes (e.g. biological processes and economical processes). We demonstrate the validity and the applicability of the information transfer concept by three well understood physical processes. As an interesting astronomical application we will show that the information transfer concept allows to rationalize and to quantify the K effect.
I wonder if they saw my blog? I have about 1000 pageviews from Germany ...
1. How money transfers information
UPDATE! I forgot this blog's first birthday! I just noticed the date on the first post (linked up at the top) was April 24, 2013. As a little celebration, here are the top three posts since the blog's inception (I'm actually really proud of all three of these):
2. Entropy and microfoundations
3. The link between the monetary base and interest rates