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Published in:
1987 | OriginalPaper | Chapter
Taking Pure Theory to Data: Arrow’s Seminal Contribution
Author : Robert M. Townsend
Published in: Arrow and the Ascent of Modern Economic Theory
Publisher: Palgrave Macmillan UK
Included in: Professional Book Archive
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It is sometimes thought that the Arrow-Debreu model is a strange if not dubious starting point for empirical work. This short note honouring Arrow’s (1953) seminal contribution takes the opposite point of view. It argues that the Arrow-Debreu model is rich in empirical implications, both directly, on its own, and indirectly, as the fountainhead of contributions that seek to explain otherwise anomalous observations.