A Minute with Kenneth J. Arrow

In each issue, Algorithmic Finance features a brief interview with one member of our advisory or editorial boards or another leading academic or practitioner. These brief conversations are intended to provide a glimpse of their current thinking. In this issue, we talk with Kenneth J. Arrow. Kenneth J. Arrow is the Joan Kenney Professor of Economics and Professor of Operations Research, emeritus; a CHP/PCOR fellow; and an FSI senior fellow by courtesy. He is a Nobel Prize-winning economist whose work has been primarily in economic theory and operations research, focusing on areas including social choice theory, risk bearing, medical economics, general equilibrium analysis, inventory theory, and the economics of information and innovation. He was one of the first economists to note the existence of a learning curve, and he also showed that under certain conditions an economy reaches a general equilibrium. In 1972, together with Sir John Hicks, he won the Nobel Prize in economics for his pioneering contributions to general equilibrium theory and welfare theory. To date, he is still the youngest person ever to receive that award. Arrow has served on the economics faculties of the University of Chicago, Harvard and Stanford. Prior to that, he served as a weather officer in the U.S. Air Corps (1942–1946), and a research associate at the Cowles Commission for Research in Economics (1947–1949). In addition to the Nobel Prize, he has received the American Economic Association’s John Bates Clark Medal and was a recipient of the 2004 National Medal of Science, 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. He is a member of the National Academy of Sciences and the Institute of Medicine. He received a BS from City College, an MA and PhD from Columbia University, and holds approximately 20 honorary degrees.