Kenneth Arrow: Architect of Modern Economic Theory

Suman Kumar

Kenneth Arrow (23 August 1921 – 21 February 2017) was a distinguished American economist.

Life and Career

Kenneth Arrow was born on 23 August 1921, in New York, New York, United States. He attended Columbia University, where he completed his bachelor’s degree in social science in 1940. He pursued further studies at Columbia, obtaining his master’s degree in economics in 1941. During World War II, he worked as a weather officer in the United States Army Air Forces, contributing to the war effort.

Arrow’s academic career soared after the war. He completed his Ph.D. in economics at Columbia in 1951 under the guidance of notable economist Harold Hotelling. His groundbreaking doctoral thesis, which delved into the theory of social choice, laid the foundation for much of his future work.

Arrow’s work spanned a wide range of topics, including general equilibrium theory, welfare economics, information economics, and social choice theory. His most famous contribution, the “Arrow Impossibility Theorem,” published in 1950, demonstrated the inherent challenges in creating a perfect voting system that adhered to specific criteria. This theorem had far-reaching implications for political science and decision-making theory.

Throughout his career, Arrow held prestigious academic positions, including at Stanford University, Harvard University, and the University of Chicago. His research and insights earned him numerous awards and honors, solidifying his reputation as a preeminent economist. Kenneth Arrow passed away on 21 February 2017, in Palo Alto, California, United States.

Award and Legacy

In 1972, he was awarded the Nobel Memorial Prize in Economic Sciences jointly with John Hicks for their foundational work in general equilibrium theory and welfare economics.

Arrow’s legacy extended beyond his academic achievements. His work in information economics, particularly the “Arrow-Debreu model,” laid the groundwork for understanding how markets function with imperfect information. This has had a profound impact on finance, insurance, and the broader economy.