Economist, Political Theorist (1921-2017)
Kenneth Arrow is described as “One of the great minds of the 20th Century who moved economic science forward decades in a single stroke.”
Among his incredible accolades, Arrow was awarded the Noble Prize in Economics in 1972 (alongside John Hicks), the John Bates Clark Medal in 1957, the von Neumann Theory Prize in 1986 and, for his research on the problem of making decisions using imperfect information, the National Medal of Science in 2004 (the highest scientific honour that can be presented in the USA).
Arrow was a prolific contributor in the field of economics. For instance, it was Arrow who posited the fundamental theorems of welfare economics. One of his most significant pieces of work was in general equilibrium. Arrow, alongside Gerard Debreu, developed the first rigorous proof of the existence of a market clearing equilibrium in general equilibrium models. Arrow even extended his research to incorporate uncertainty and stability in his models. Arrow is also known for his impossibility theorem, which underlines the complexities of aggregating individual preferences into aggregate preferences.
Arrow was also one of the precursors of Endogenous Growth theory, pioneered the investigation of problems caused by asymmetric information and contributed to the foundation of health economics.
Kenneth Arrow was a true heavyweight economist and his contributions will continue to echo throughout future theories and models.
“Vast ills have followed a belief in certainty.”
“One doesn’t like instabilities in markets; they may be damaging, but probably not fatal, as the October ’87 crash showed. It turned out to be essentially inconsequential. So if that’s true, I’m not very worried about the welfare of those who are investing any more than I am about the welfare of those who go into casinos.”
– Kenneth Arrow