dorsal/arxiv
View SchemaA Natural Value Unit - Econophysics as Arbiter between Finance and Economics
| Authors | Steivan Defilla |
|---|---|
| Categories | |
| ArXiv ID | physics/0608087 |
| URL | https://arxiv.org/abs/physics/0608087 |
| DOI | 10.1016/j.physa.2007.02.066 |
Abstract
Foreign exchange markets show that currency units (= accounting or nominal price units) are variables. Technical and economic progress evidence that the consumer baskets (= purchasing power units or real price units) are also variables. In contrast, all physical measurement units are constants and either defined in the SI (= metric) convention or based upon natural constants (= "natural" or Planck units). Econophysics can identify a constant natural value scale or vaue unit (natural numaraire) based upon Planck energy. In honour of the economist L. Walras, this "Planck value" could be called walras (Wal), thereby using the SI naming convention. One Wal can be shown to have a physiological and an economic interpretation in that it is equal to the annual minimal real cost of physiological life of a reference person at minimal activity. The price of one Wal in terms of any currency can be estimated by hedonic regression techniques used in inflation measurement (axiometry). This pilot research uses official disaggregated Swiss Producer and Consumer Price Index data and estimates the hedonic walras price (HWP), quoted in Swiss francs in 2003, and its inverse, the physical purchasing power (PhPP) of the Swiss franc in 2003.
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"abstract": "Foreign exchange markets show that currency units (= accounting or nominal\nprice units) are variables. Technical and economic progress evidence that the\nconsumer baskets (= purchasing power units or real price units) are also\nvariables. In contrast, all physical measurement units are constants and either\ndefined in the SI (= metric) convention or based upon natural constants (=\n\"natural\" or Planck units). Econophysics can identify a constant natural value\nscale or vaue unit (natural numaraire) based upon Planck energy. In honour of\nthe economist L. Walras, this \"Planck value\" could be called walras (Wal),\nthereby using the SI naming convention. One Wal can be shown to have a\nphysiological and an economic interpretation in that it is equal to the annual\nminimal real cost of physiological life of a reference person at minimal\nactivity. The price of one Wal in terms of any currency can be estimated by\nhedonic regression techniques used in inflation measurement (axiometry). This\npilot research uses official disaggregated Swiss Producer and Consumer Price\nIndex data and estimates the hedonic walras price (HWP), quoted in Swiss francs\nin 2003, and its inverse, the physical purchasing power (PhPP) of the Swiss\nfranc in 2003.",
"arxiv_id": "physics/0608087",
"authors": [
"Steivan Defilla"
],
"categories": [
"physics.soc-ph",
"q-fin.GN"
],
"doi": "10.1016/j.physa.2007.02.066",
"title": "A Natural Value Unit - Econophysics as Arbiter between Finance and Economics",
"url": "https://arxiv.org/abs/physics/0608087"
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