The Role of Entropy in the Development of Economics.

The aim of this paper is to examine the role of thermodynamics, and in particular, entropy, for the development of economics within the last 150 years. The use of entropy has not only led to a significant increase in economic knowledge, but also to the emergence of such scientific disciplines as econophysics, complexity economics and quantum economics. Nowadays, an interesting phenomenon can be observed; namely, that rapid progress in economics is being made outside the mainstream. The first significant achievement was the emergence of entropy economics in the early 1970s, which introduced the second law of thermodynamics to considerations regarding production processes. In this way, not only was ecological economics born but also an entropy-based econometric approach developed. This paper shows that non-extensive cross-entropy econometrics is a valuable complement to traditional econometrics as it explains phenomena based on power-law probability distribution and enables econometric model estimation for non-ergodic ill-behaved (troublesome) inverse problems. Furthermore, the entropy economics has accelerated the emergence of modern econophysics and complexity economics. These new directions of research have led to many interesting discoveries that usually contradict the claims of conventional economics. Econophysics has questioned the efficient market hypothesis, while complexity economics has shown that markets and economies function best near the edge of chaos. Quantum economics has already appeared on the horizon, which recognizes money as a fundamental measurement device in the economy. The development of these sciences may indicate the need to reformulate all mainstream economics from its foundations.

New Measure of Economic Development Based on the Four-Colour Theorem.

The location quotient is one of the basic quantitative tools for identifying the regional poles and the turnpikes of economic growth in spatial economy. The disadvantage of this traditional measure is the limited scope of economic information contained in it. The new measure of economic development proposed in the article encompasses a complex spectrum of phenomena in one number, as it takes into account the influence of the public administration sector, as well as top technology in the form of ICT and its practical business models. It also takes into account the digital prosumption and the platforms for participation. The participation platforms in the public administration sector are the websites of municipal public administration offices. A cluster analysis was used to distinguish four quality classes of these websites. These classes were assigned four different colours, which were then used to draw up a map of the selected province. Each municipality is marked with a colour that corresponds to the quality class of the website of the state administration office operating on its territory. The colour system resulting from the four-colour theorem and the corresponding dual graph play the role of a reference system in relation to each empirical colour distribution and another dual graph related to it. The measure of the economic development of a region is the degree of reduction of the dual graph corresponding to the empirical distribution of colours, which identifies the actual growth poles and determines the routes of growth. The presented indicator better and more precisely identifies poles and routes of economic growth than the traditional location quotient.

Innovativeness of Industrial Processing Enterprises and Conjunctural Movement.

Singulation of components determining the innovative activity of enterprises is a complex issue as it depends on both microeconomic and macroeconomic factors. The purpose of this article is to present the results of research on the impact of the mutual interactions between ownership and the size of companies on the achievement of the objectives of innovative activity by Polish industrial processing enterprises in changing cyclical conditions. The importance of innovation barriers was also assessed. Empirical data came from three periods that covered different phases of the business cycle: prosperity 2004-2006, global financial crisis 2008-2010, and recovery 2012-2014. The research used a cybernetic approach based on feedback loops presenting interactions between variables. In addition, two statistical methods were used: the Pearson's χ2 independence test and correspondence analysis. The following discoveries were made during the research: (1) consideration of the combined impact of ownership and the size of companies on their innovation activities makes it possible to study phenomena that may be overlooked if the impact of these factors is considered separately; (2) public enterprises achieve significantly worse results in terms of innovation than companies from other ownership sectors; (3) the Red Queen effect, which assumes that the best innovative enterprises exert selection pressure on all other companies, applies to industrial processing companies, and in particular public enterprises; (4) the industrial processing section is more sensitive to secular trends than to cyclical fluctuations; (5) confirmation of occurrence of the Polish Green Island effect, which assumes that companies achieve good results in terms of innovation, irrespective of the phases of the business cycle; and (6) statistical evidence is provided that the global financial crisis may be associated with the turn of the Fifth and Sixth Kondratieff waves. Most likely, the role of the communication channel between the world economy and the Polish manufacturing section is fulfilled by foreign ownership, whose percentage of share capital of this section is estimated at 50%.

Numerical explorations of R. M. Goodwin's business cycle model.

Goodwin's model, which was formulated in , still attracts economists' attention. The model possesses numerous interesting properties that have been discovered only recently due to the development of the chaos theory and the complexity theory. The first numerical explorations of the model were conducted in the early s by Strotz, McAnulty and Naines (1953). They discovered the coexistence of attractors that are well-known today, two properties of chaotic systems: the sensitive dependence on the initial conditions and the sensitive dependence on parameters. The occurrence of periodic and chaotic attractors is dependent on the value of parameters in a system. In case of certain parametric values fractal basin boundaries exist which results in enormous system sensitivity to external noise. If periodic attractors are placed in the neighborhood of the fractal basin boundaries, then even a low external noise can move the trajectory into the region in which the basin's structure is tangled. This leads to a kind of movement that resembles a chaotic movement on a strange attractor. In Goodwin's model, apart from typical chaotic behavior, there exists yet another kind of complex movements - transient chaotic behavior that is caused by the occurrence of invariant chaotic sets that are not attracting. Such sets are represented by chaotic saddles. Some of the latest observation methods of trajectories lying on invariant chaotic sets that are not attracting are straddle methods. This article provides examples of the basin boundary straddle trajectory and the saddle straddle trajectory. These cases were studied by Lorenz and Nusse (2002). I supplement the results they acquired with calculations of capacity dimension and correlation dimension.

Interdisciplinary matrix in economics: two applications to the transition from socialism to capitalism.

The 7-fold interdisciplinary matrix is introduced. This integrated methodological point of view is original, although it is based on ideas of others in various ways. The name for this new approach draws on the Kuhnian notion of a disciplinary matrix. There are four components of the Kuhnian matrix on which the existence of scientific communities hinges: symbolic generalizations, models, values, and exemplars. In this context the term "paradigm" should refer to exemplars. The interdisciplinary matrix is composed of seven elements: cybernetics, catastrophe theory, fractal geometry, deterministic chaos, artificial intelligence, theory of complexity, and humanistic values. Scientific developments have recently brought substantial changes in the structure of scientific communities. Transferability of ideas and thoughts contributed to the creation of scientific communities, which unite representatives of various professions. When researching into certain phenomena we no longer need to develop theories for them from scratch, as we can draw on the achievements in other disciplines. Two examples of the employment of the interdisciplinary matrix in macroeconomics are elaborated here: the investment cycle model in socialist economy, and the model of economic transformation based on chaotic hysteresis.