Product Code Database
Kenneth Joseph Arrow (August 23, 1921 – February 21, 2017) was an American economist, mathematician and political theorist. He received the John Bates Clark Medal in 1957, and the Nobel Memorial Prize in Economic Sciences in 1972, along with John Hicks.
In economics, Arrow was a major figure in postwar neoclassical economic theory. Four of his students (Roger Myerson, Eric Maskin, John Harsanyi, and Michael Spence) went on to become Nobel laureates themselves. His contributions to social choice theory, notably his "impossibility theorem", and his work on general equilibrium analysis are significant. His work in many other areas of economics, including endogenous growth theory and the economics of information, was also foundational.
He graduated from Townsend Harris High School and then earned a bachelor's degree in mathematics from the City College of New York in 1940, where he was a member of Sigma Phi Epsilon. He then attended Columbia University for graduate studies, obtaining a master's degree in mathematics in June 1941. At Columbia, Arrow studied under Harold Hotelling, who influenced him to switch fields to economics. He served as a weather officer in the United States Army Air Forces from 1942 to 1946.
Arrow returned to Stanford University in 1979 and became the Joan Kenney Professor of Economics and Professor of Operations Research. He retired in 1991. As a Fulbright Distinguished Chair, in 1995 he taught economics at the University of Siena. He was also a founding member of the Pontifical Academy of Social Sciences and a member of the board at the Santa Fe Institute. At various stages in his career he was a Fellow of Churchill College, Cambridge.
He was one of the founding editors of the Annual Review of Economics, which was first published in 2009.
Four of his former students have gone on to become Nobel Prize winners, namely John Harsanyi, Eric Maskin, Roger Myerson, and Michael Spence.
A collection of Arrow's papers is housed at the Rubenstein Library at Duke University.
In what he named the General Impossibility Theorem, he theorized that, unless we accept to compare the levels of utility reached by different individuals, it is impossible to formulate a social preference ordering that satisfies all of the following conditions:
The theorem has implications for welfare economics and theories of justice, and for voting theory (it extends the Condorcet paradox). Following Arrow's logical framework, Amartya Sen formulated the liberal paradox which argued that given a status of "Minimal Liberty" there was no way to obtain Pareto optimality, nor to avoid the problem of social choice of neutral but unequal results.
In 1974, The American Economic Association published the paper written by Kenneth Arrow, General Economic Equilibrium: Purpose, Analytic Techniques, Collective Choice, where he states:
He has received Honorary degree from the University of Chicago (1967), the University of Vienna (1971) the City University of New York (1972). On 2 June 1995 he received an honorary doctorate from the Faculty of Social Sciences at Uppsala University, Sweden. He was elected a Foreign Member of the Royal Society (ForMemRS) in 2006.
He was elected to the 2002 class of Fellows of the Institute for Operations Research and the Management Sciences. In 2007 he was the first Witten Lecturer at the Witten/Herdecke University as the awardee of the Witten Lectures in Economics and Philosophy.
Arrow died in his Palo Alto, California, home on February 21, 2017, at the age of 95.
Academic career
From 1946 to 1949, Arrow was a graduate student at Columbia University, and also worked as a research associate at the Cowles Commission. During that time he also was an assistant professor of economics at the University of Chicago and worked at the RAND Corporation in California. He left the University of Chicago to become an acting assistant professor of economics and statistics at Stanford University. In 1951, he received a PhD degree from Columbia University. He served in the government on the staff of the Council of Economic Advisers in the 1960s with Robert Solow. In 1968, he left Stanford for Harvard University, where he was appointed Professor of Economics; it was during his tenure there that he received the Nobel Prize in Economics.
Arrow's impossibility theorem
Arrow's monograph Social Choice and Individual Values derives from his 1951 PhD thesis.
General equilibrium theory
Work by Arrow and Gérard Debreu and simultaneous work by Lionel McKenzie offered the first rigorous proofs of the existence of a market clearing equilibrium. For this work and his other contributions, Debreu won the 1983 Nobel Prize in Economics. Arrow went on to extend the model and its analysis to include uncertainty, the stability. His contributions to the general equilibrium theory were influenced by Adam Smith's Wealth of Nations. Written in 1776, The Wealth of Nations is an examination of economic growth brought forward by the division of labor, by ensuring interdependence of individuals within society.Smith, Adam, and Andrew S. Skinner. The Wealth of Nations. London: Penguin Books, 1999. Print.
Fundamental theorems of welfare economics
In 1951, Arrow presented the first and second fundamental theorems of welfare economics and their proofs without requiring differentiability of utility, consumption, or technology, and including corner solutions.
Endogenous-growth theory
Arrow was one of the precursors of endogenous growth theory, which seeks to explain the source of technical change, which is a key driver of economic growth. Until this theory came to prominence, technical change was assumed to occur exogenously—that is, it was assumed to occur outside economic activities, and was outside (exogenous) to common economic models. At the same time there was no economic explanation for why it occurred. Endogenous-growth theory provided standard economic reasons for why firms innovate, leading economists to think of innovation and technical change as determined by economic actors, that is endogenously to economic activities, and thus belong inside the model. Endogenous growth theory started with Paul Romer's 1986 paper, borrowing from Arrow's 1962 "learning-by-doing" model which introduced a mechanism to eliminate diminishing returns in aggregate output. A literature on this theory has developed subsequently to Arrow's work.
Information economics
In other pioneering research, Arrow investigated the problems caused by asymmetric information in markets. In many transactions, one party (usually the seller) has more information about the product being sold than the other party. Asymmetric information creates incentives for the party with more information to cheat the party with less information; as a result, a number of market structures have developed, including warranty and third party authentication, which enable markets with asymmetric information to function. Arrow analysed this issue for medical care (a 1963 paper entitled "Uncertainty and the Welfare Economics of Medical Care", in the American Economic Review); later researchers investigated many other markets, particularly second-hand assets, online auctions and insurance.
Awards and honors
Arrow was awarded the John Bates Clark Medal in 1957 and was elected a Fellow of the American Academy of Arts and Sciences in 1959. In 1968, he was elected to both the United States National Academy of Sciences and the American Philosophical Society. He was the joint winner of the Nobel Memorial Prize in Economics with John Hicks in 1972 and the 1986 recipient of the von Neumann Theory Prize. He was one of the recipients of the 2004 National Medal of Science, the nation's highest scientific honor, presented by President George W. Bush for his contributions to research on the problem of making decisions using imperfect information and his research on bearing risk.
Personal life and death
Arrow was a brother to the economist Anita Summers, uncle to economist and former Treasury Secretary and Harvard President Lawrence Summers, and brother-in-law of the late economists Robert Summers and Paul Samuelson. In 1947, he married Selma Schweitzer, graduate in economics at the University of Chicago (1986). 9780521304542, Cambridge University Press. ISBN 9780521304542 and psychotherapist, who died in 2015; they had two children, David Michael (b. 1962), an actor, and Andrew Seth (b. 1965), an actor/singer.
Publications
(1977). 9780511752940, Cambridge Books Online. ISBN 9780511752940
(1981). 9780444861269, Elsevier North-Holland. ISBN 9780444861269
(1988). 9780201156850, Addison-Wesley Pub. Co.. ISBN 9780201156850 Book details.
(2026). 9781840645699, Edward Elgar Publishing. ISBN 9781840645699
(1988). 9780201156850, Addison-Wesley Pub. Co. ISBN 9780201156850
See also
External links
Categories: 1921 Births, 2017 Deaths, Nobel Laureates In Economics, American Nobel Laureates, Jewish American Non-fiction Writers, Jewish American Economists, 20th-century American Economists, 21st-century American Male Writers, 21st-century American Economists, American Economics Writers, American People Of Romanian-jewish Descent, American Political Philosophers, American Political Writers, American Social Democrats, City College Of New York Alumni, Columbia Graduate School Of Arts And Sciences Alumni, Writers From Queens, New York, Military Personnel From New York City, United States Army Air Forces Officers, Fellows Of The American Academy Of Arts And Sciences, Fellows Of The American Statistical Association, Fellows Of The Econometric Society, Foreign Members Of The Royal Society, Welfare Economists, American Game Theorists, General Equilibrium Theorists, Intergovernmental Panel On Climate Change Lead Authors, Jewish American Scientists, John Von Neumann Theory Prize Winners, Mathematical Economists, Members Of The Pontifical Academy Of Social Sciences, Members Of The United States National Academy Of Sciences, Foreign Members Of The Russian Academy Of Sciences, National Medal Of Science Laureates, Presidents Of The Econometric Society, Rand Corporation People, Stanford University Department Of Economics Faculty, Townsend Harris High School Alumni, University Of Chicago Faculty, Voting Theorists, Presidents Of The American Economic Association, Santa Fe Institute People, Distinguished Fellows Of The American Economic Association, 21st-century American Non-fiction Writers, American Male Non-fiction Writers, Mathematicians From New York City, Social Scientists From New York City, Lawrence Summers, United States Army Air Forces Personnel Of World War Ii, Corresponding Fellows Of The British Academy, Annual Reviews Editors, Members Of The National Academy Of Medicine, Members Of The American Philosophical Society, Jewish Nobel Laureates, American Fellows Of The Royal Society
|
|
