The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Arrow, Kenneth Joseph (Born 1921)

  • Ross M. Starr
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1926

Abstract

Kenneth Arrow is the author of key post-Second World War innovations in economics that have made economic theory a mathematical science. The Arrow Possibility Theorem created the field of social choice theory. Arrow extended and proved the relationship of Pareto efficiency with economic general equilibrium to include corner solutions and non-differentiable production and utility functions. With Gerard Debreu, he created the Arrow–Debreu mathematical model of economic general competitive equilibrium including sufficient conditions for the existence of market-clearing prices. Arrow securities and contingent commodities extend the model to cover uncertainty and provide a cornerstone of the modern theory of finance.

Keywords

American economic association Arrow, K Arrow–debreu model of general equilibrium Arrow-pratt index of risk aversion Arrows’ theorem Bergson social welfare function Black, D Condorcet, J.-A.-N Constant-elasticity-of-substitution production function Contingent commodities Control theory Convexity: in theorems of welfare economics Corner solutions Cowles commission for research in economics Debreu, G Discrimination: racial Econometric society Endogenous growth Expected utility theorem First fundamental theorem on welfare economics Fixed-point theorem Game theory Growth models Hahn, F Hicks, J Hotelling, H Impossibility theorem Independence of irrelevant alternatives Inventory policy: optimal Knowledge: as externality Kuhn-Tucker theorem Marginal rate of substitution Mathematical economics Medical insurance Moral hazard Nash equilibrium Pareto efficiency Paradox of voting Partial equilibrium theory Principal-agent problem In medical care Racial discrimination Arrow–pratt index of risk aversion Russell, B Samuelson, P Second fundamental theorem on welfare economics Securities markets Social choice Solow, R Stigler, G Tarski, A Technical change Tinbergen model Tobin, J Uzawa, H Walras’s law 

JEL Classifications

B31 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Ross M. Starr
    • 1
  1. 1.