Tuesday, January 25, 2011

Comparing the yield curve to a black body

If you treat the Shannon formula as a distribution of noise radiation we get the black body formula, a very cold black body.  Take the Shannon formula and compute the Noise as a function of signal, channel rate and channel bandwidth.  In the quantum system, h signal are the quants of  'energy level'.  then we have the math from thiis paper, we will find  the quants relate to the C/B in the formula, thus completing the picture.  Hence the black body formula, flipped around on the Y axis is an economic yield curve.
Create this:

from:

I think we get a hint about the number of possible sums yielding a given number with a look at the first factor in the equation above.  Those factors are the energy levels, corresponding to our quants in the economy.  The Intensity is really the Gibbs phenomena that tells us the reserve ratio.  The hv part indicates the actual capacity for any given bandwidth which appears as temperature.

The economic formula economists whould use is:

Given an economy with a certain bandwidth and subject to new quantum constraints, what is the closest black body fit.  Our simple Adaptive Huffman encoder gives a good approximation.

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