Entropy and economics: A bioeconomic perspective on economic development and sustainability.

This paper investigates the integration of the thermodynamic concept of entropy into economic theory, with a particular focus on the development of bioeconomics. After introducing the physical foundations of entropy, we explore how these principles have been adapted into economic thought to address key challenges related to resource scarcity, ecological constraints, and the irreversible nature of economic processes. Among others, we highlight Georgescu-Roegen’s bioeconomic approach, grounded in the Second Law of Thermodynamics, and discuss how it contrasts with the assumption of neoclassical economics, which traditionally focuses on equilibrium and efficiency without fully accounting for the physical and thermodynamic constraint of resource use. In addition, we review specific applications of entropy-based techniques into the economic field, including production, growth theories, and policy evaluation. While entropy provides valuable insights for sustainable economic modelling, we also highlight its limitations; particularly, in addressing the complexities of socio-economic systems, accounting for technological change, and applying entropy-based concepts in empirical economics, where their integration into measurable models remains methodologically and computationally challenging. Finally, we propose possible directions for future research, particularly concerning the integration of entropy into post-growth frameworks, to develop a more comprehensive understanding of sustainable economic development.