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Some Developments in Economic Theory Since 1940: An Eyewitness Account


  • Kenneth J. Arrow

    () (Department of Economics, Stanford University, Stanford, California 94305)


Any psychologist who has studied eyewitness accounts knows first of all how unreliable they are. I therefore submit this informal account of some developments in economic theory without research, just as a set of recollections. It is also not an autobiography, nor a systematic account of my own work. Rather, I consider primarily those developments in economic theory that have had both general interest in the field and special concern for me. For example, as social choice theory is still a specialized field, I am not going to discuss it at all. Further, as it has turned out, I emphasize the developments of technique, although to some extent I refer to some of the underlying visions of the economy to which they are applied. To evaluate my eyewitness testimony, I give the reader some idea of my background and, in particular, the path that led me to be an economist and that has influenced my work and my perception of the development of economics in general. (As my friend Paul David keeps on reminding me and the rest of the world, all development is path-dependent.) I then follow up with four major aspects of economic research in the last 60 years, the period of my scholarly activity. One, econometric methodology and practice, is of such fundamental importance that it cannot go unnoticed, although I played no role in it. With the other three, general equilibrium, dynamic processes, and uncertainty and information, I was more intimately involved.

Suggested Citation

  • Kenneth J. Arrow, 2009. "Some Developments in Economic Theory Since 1940: An Eyewitness Account," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 1-16, May.
  • Handle: RePEc:anr:reveco:v:1:y:2009:p:1-16

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    Cited by:

    1. Reikin Vitaliy S., 2013. "Theoretical and methodological grounds of mainstream and their application in the context of shadow economy," The Problems of Economy, RESEARCH CENTRE FOR INDUSTRIAL DEVELOPMENT PROBLEMS of NAS (KHARKIV, UKRAINE), issue 4, pages 134-139.

    More about this item


    econometrics; general equilibrium; uncertainty; dynamics; information;

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General


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