Kenneth Arrow (1921–2017)
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Who They Were
Kenneth Arrow (1921-2017) was an American economist and one of the most influential economic theorists of the twentieth century. Working at the frontier of mathematical economics, he made foundational contributions to general equilibrium theory, welfare economics and the economics of information and uncertainty. In 1972 he shared the Nobel Memorial Prize with John Hicks for their pioneering work on general equilibrium and welfare theory, and he remains among the youngest people ever to receive the award. He taught at Stanford and Harvard and mentored several later laureates. His reach extended across social choice, health economics and the analysis of risk. He stands, alongside Leon Walras, Alfred Marshall and Paul Samuelson, in the central line of economists who developed the modern theory of market equilibrium.
Key Contributions
In 1954 Arrow, with Gerard Debreu, published a proof in Econometrica that under specified conditions, including convex preferences, no market power and complete markets, a competitive general equilibrium exists. Using fixed-point methods, the Arrow-Debreu result gave rigorous mathematical form to Adam Smith's intuition that decentralised markets can be mutually consistent, and it is counted among the landmark achievements of twentieth-century economic theory. Arrow's earlier impossibility theorem in social choice showed that no voting rule can consistently aggregate individual preferences into a coherent social ordering while satisfying a short list of reasonable conditions. He also did pioneering work on the economics of information, uncertainty and medical care. Arrow received the Nobel Memorial Prize in 1972; Debreu was honoured separately in 1983.
On EconRecall
American economist and 1972 Nobel laureate; co-author of the Arrow-Debreu proof that a competitive general equilibrium exists. Play the games that feature Kenneth Arrow: