The Economics of Kenneth Arrow

#1

Post by everbody » Wed, Aug 28, 2019, 6:26 AM UTC

The Economics of Kenneth Arrow
annualreviews.org

Re: The Economics of Kenneth Arrow

#2

Post by [deleted] » Wed, Aug 28, 2019, 8:14 AM UTC

[deleted]

Re: The Economics of Kenneth Arrow

#3

Post by sun_n_surf » Wed, Aug 28, 2019, 8:15 AM UTC

Of all the things that I thought I would never see on HN. However, this is a technical review, and needs an advanced formal economics education to appreciate.

Re: The Economics of Kenneth Arrow

#4

Post by cies » Wed, Aug 28, 2019, 8:18 AM UTC

sun_n_surf wrote: post #3

Of all the things that I thought I would never see on HN. However, this is a technical review, and needs an advanced formal economics education to appreciate.

You (or anyone else) aware of an intro to his work for mere mortals?

Re: The Economics of Kenneth Arrow

#5

Post by arethuza » Wed, Aug 28, 2019, 8:25 AM UTC

cies wrote: post #4

sun_n_surf wrote: post #3

Of all the things that I thought I would never see on HN. However, this is a technical review, and needs an advanced formal economics education to appreciate.

You (or anyone else) aware of an intro to his work for mere mortals?

Arrow's work is covered (at a high level) in "Licence to be Bad, How Economics Corrupted Us" by Jonathan Aldred:

https://www.penguin.co.uk/books/306/306792/licence-to-be-bad...

Edit: A really good book - once I finished listening to the audiobook version I went right back to the start and listened to it again and I'm going to order a paper version.

Re: The Economics of Kenneth Arrow

#6

Post by n4r9 » Wed, Aug 28, 2019, 9:14 AM UTC

sun_n_surf wrote: post #3

Of all the things that I thought I would never see on HN. However, this is a technical review, and needs an advanced formal economics education to appreciate.

I have a mathematics background and feel like I could muscle my way through most of this if I wanted to. Admittedly this is based on reading the third section and skimming a lot of the rest, but it's well-written and pretty self-contained. Seems like you just need familiarity with mathematical notation and concepts like convexity and equilibrium.

Re: The Economics of Kenneth Arrow

#7

Post by Apfel » Wed, Aug 28, 2019, 9:18 AM UTC

It's a testament to the sheer breadth of Arrow's work that he essentially created the field of health economics and it's only given a cursory mention in the intro.

The below (not excessively mathematical) paper was light years ahead of its time, and is well worth a read even now.

https://web.stanford.edu/~jay/health_class/Readings/Lecture0...

Re: The Economics of Kenneth Arrow

#8

Post by keldaris » Wed, Aug 28, 2019, 9:38 AM UTC

sun_n_surf wrote: post #3

Of all the things that I thought I would never see on HN. However, this is a technical review, and needs an advanced formal economics education to appreciate.

As a physicist, I found it to be a very pleasant and self-contained read that required very little knowledge of economics to appreciate. It does require some familiarity with mathematical notation, but the logic of the exposition was easy to follow. I would encourage more people to read this review.

Re: The Economics of Kenneth Arrow

#9

Post by QuesnayJr » Wed, Aug 28, 2019, 11:07 AM UTC

sun_n_surf wrote: post #3

Of all the things that I thought I would never see on HN. However, this is a technical review, and needs an advanced formal economics education to appreciate.

I can try to answer any questions you might have.

The article highlights two main contributions of Arrow.

One is a question of how a society can make collective decisions. A classical answer is "utilitarianism" -- if a collective decision makes me happy more than it makes you sad, then we should do it. This requires society to be able to be able to measure exactly how happy something makes me and how sad it makes you. What if we can't make those kinds of measurements? Arrow shows that (under reasonable assumptions) we're stuck. There is no good rule to decide.

His other contribution was to "general equilibrium". A set of markets are "in equilibrium" if we can find prices so that supply and demand are equal in every market simultaneously. Do such prices exist, even in theory? Arrow showed that the answer is yes.

Re: The Economics of Kenneth Arrow

#10

Post by QuesnayJr » Wed, Aug 28, 2019, 11:13 AM UTC

arethuza wrote: post #5

cies wrote: post #4

Earlier quoted context omitted.

You (or anyone else) aware of an intro to his work for mere mortals?

Arrow's work is covered (at a high level) in "Licence to be Bad, How Economics Corrupted Us" by Jonathan Aldred: https://www.penguin.co.uk/books/306/306792/licence-to-be-bad... Edit: A really good book - once I finished listening to the audiobook version I went right back to the start and listened to it again and I'm going to order a paper version.

Economics is an imperfect field, but a major source of criticism of it is that many people fundamentally object to the idea that you can ask "is" questions about the economy. The only proper questions are "ought" questions, and since economics is mostly about "is" questions, it's automatically suspect.

There really were a group of economists that fit the "license to be bad" stereotype, such as Milton Friedman. But Arrow was not one of them.