Bookkeepingmechanics: Bookkeeping Analysis with Feynman graphs

Bookkeeping-Mechanics
Bookkeeping described as physical momentum.

Bookkeeping Mistakes (PDF)
(Talk at the Monetary Reform Conference of the American Monetary Institute 2007)
Movie of the Talk:
Introduction (5 MB)
I: The hidden Currency of Banking (55 MB)
II: Towards Time Symmetric Money (21 MB)
III: Inflation from Random Transfer (11 MB)
IV: Wealth Concentration 16 MB)
Conclusion (7 MB)

Noether Theorem on Monetary Systems (PDF without the movies)
(Talk at the spring meeting of the German Physical Society, 2007)
Abstract: Contrary to common belief, monetary systems can be implemented by bookkeeping in various ways.
I classify the implementations by the symmetry properties of their transactions. Each symmetry relates to a
conservation law in close analog to the Noether theorem:
- Symmetry of time asks for constant quantity of money
- Symmetry between transaction partners asks for zero profit
- Inclusion of the money issuer asks for internal exchange rates
Above relations can be directly visualized with a Feynman-Graph mapping of bookkeeping to mechanics.
I give real world examples on how above symmetries are not implemented by modern monetary systems.
Obeying the symmetries would implement monetary systems more stably with less inertial feedback loops.

The missing exchange rate of Banking,
Strong wealth condensation in stochastic transfer potential economies
(Posters at the spring meeting of the German Physical Society, 2006)

Nonequilibrium Thermodynamics of Wealth Condensation, Physica A, 369:714-722 (2006)
We analyze wealth condensation for a wide class of stochastic economy models on the basis of the economic analog
of thermodynamic potentials, termed transfer potentials. The economy model is based on three common transfers
modes of wealth: random transfer, profit proportional to wealth and motivation of poor agents to work harder.
The economies never reach steady state. Wealth condensation is the result of stochastic tunneling through a metastable
transfer potential. In accordance with reality, both wealth and income distribution transiently show Pareto tails for high
income subjects. For metastable transfer potentials, exponential wealth condensation is a robust feature. For example
with 10 % annual profit 1% of the population owns 50 % of the wealth after 50 years. The time to reach such a strong
wealth condensation is a hyperbolic function of the annual profit rate.

Social Networks of Money analyzed with Feynman-Graphs (2005)
Talk given at the Frühjahrstagung of the German Physical Society

Nontrivial Bookkeeping: a mechanical Perspective

Nichttriviale Buchhaltung: eine mechanische Sichtweise

Although economic practice is measured by bookkeeping,economic theory neglects its role. We want to bridge this gap.
We analyze the structure of bookkeeping from a mechanical viewpoint and compare money with momentum.Bookkeeping
and income statements translate to the physicist vocabulary of momentum,energy and force.Financial transactions become
Feynman-graphs.Although the realization principle enforces conservation of momentum in each currency,no conservation
of energy is implemented by bookkeeping. We discuss the transaction axiomatics of bookkeeping from this physical viewpoint.

Transfer Potentials shape and equilibrate Monetary Systems Physica A 321:605-618 (2003)
Transferpotentiale formen und equilibrieren Geldsysteme [German translation, Nov. 2002]
We analyze a monetary system of random money transfer on the basis of double entry bookkeeping. Without boundary
conditions,we do not reach a price equilibrium and violate text-book formulas of economist ’s quantity theory (MV =PQ ).
To match the resulting quantity of money with the model assumption of a constant price, we have to impose boundary
conditions. They either restrict specific transfers globally or impose transfers locally. Both connect through a general
framework of transfer potentials. We show that either restricted or imposed transfers can shape Gaussian, tent-shape
exponential, Boltzmann-exponential, pareto or periodic equilibrium distributions. We derive the master equation and
its general time-dependent approximate solution.An equivalent of quantity theory for random money transfer under
the boundary conditions of transfer potentials is given.
Eine Einführung in das Paper [Dez. 2002] Beispiele für Transferpotentiale [April 2003]

Talk on Mechanics of Bookkeeping

Bookkeeping Mechanics submitted and declined by Journal of Finance
(the embarrassingly ignorant referee report can be obtained by email)
Double entry bookkeeping is translated to the momentum exchange of bouncing particles given in space-time graphs.
This translation defines momentum, force and energy of bookkeeping. Bookkeeping-momentum is conserved whereas
bookkeeping-energy is not. Currencies originate from particle pair creations. Liability-particles are equivalent to
asset-particles moving backwards in time. Bookkeeping is axiomatically deconstructed into basic transfer and exchange
graphs. In banking, we find a hidden exchange rate between an account currency and a loan currency. We find zero-sum
game violations in statements of capital, depreciations of tangible assets and single-sided exchanges.

Assets and liabilities are the momentum of particles and antiparticles

displayed in Feynman-graphs

An analogy between assets and liabilities and the momentum of particles and antiparticles (called actons and passons)
is proposed. It allows physicists to use physical methods in economy for the analysis of monetary systems and for the
analysis of double entry bookkeeping. Economists can use it to subdivide and discuss complicated balance transactions
in terms of Feynman-graphs which introduce the time dimension to bookkeeping. Within the analogy, assets and liabilities
come into existence by pair creation. Conservation of momentum is fulfilled whereas the conservation of energy corresponds
to the regulation of a constant amount of money. Interest rates accelerate the particles by imposing a negative friction.
The statistical description of an ideal money gas is derived and the transcription to semiconductor physics is given. The
analogy is hoped to open a new fi eld for physics and to reveal new insights on monetary systems.

Email: mail@dieterb.de