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Showing papers by "Kenneth J. Arrow published in 2014"


Journal ArticleDOI
TL;DR: This work explores how current interconnections between the aquaculture, crop, livestock, and fisheries sectors act as an impediment to, or an opportunity for, enhanced resilience in the global food system given increased resource scarcity and climate change.
Abstract: Aquaculture is the fastest growing food sector and continues to expand alongside terrestrial crop and livestock production. Using portfolio theory as a conceptual framework, we explore how current interconnections between the aquaculture, crop, livestock, and fisheries sectors act as an impediment to, or an opportunity for, enhanced resilience in the global food system given increased resource scarcity and climate change. Aquaculture can potentially enhance resilience through improved resource use efficiencies and increased diversification of farmed species, locales of production, and feeding strategies. However, aquaculture’s reliance on terrestrial crops and wild fish for feeds, its dependence on freshwater and land for culture sites, and its broad array of environmental impacts diminishes its ability to add resilience. Feeds for livestock and farmed fish that are fed rely largely on the same crops, although the fraction destined for aquaculture is presently small (∼4%). As demand for high-value fed aquaculture products grows, competition for these crops will also rise, as will the demand for wild fish as feed inputs. Many of these crops and forage fish are also consumed directly by humans and provide essential nutrition for low-income households. Their rising use in aquafeeds has the potential to increase price levels and volatility, worsening food insecurity among the most vulnerable populations. Although the diversification of global food production systems that includes aquaculture offers promise for enhanced resilience, such promise will not be realized if government policies fail to provide adequate incentives for resource efficiency, equity, and environmental protection.

465 citations


Journal ArticleDOI
TL;DR: The argument for using a declining discount rate (DDRR) is discussed in this article, where the authors use a discount rate that declines over time when evaluating the future benefits and costs of public projects.
Abstract: Should governments use a discount rate that declines over time when evaluating the future benefits and costs of public projects? The argument for using a declining discount rate (DDR) is si...

204 citations


Journal ArticleDOI
10 Apr 2014-Nature
TL;DR: Costs of carbon emissions are being underestimated, but current estimates are still valuable for setting mitigation policy, say Richard L. Revesz and colleagues.
Abstract: Costs of carbon emissions are being underestimated, but current estimates are still valuable for setting mitigation policy, say Richard L. Revesz and colleagues.

174 citations


Book ChapterDOI
TL;DR: The implications of uncertainty for public investment decisions remain controversial as mentioned in this paper, and it is widely accepted that individuals are not indifferent to uncertainty and will not, in general, value assets with uncertain returns at their expected values.
Abstract: The implications of uncertainty for public investment decisions remain controversial. The essence of the controversy is as follows. It is widely accepted that individuals are not indifferent to uncertainty and will not, in general, value assets with uncertain returns at their expected values. Depending upon an individual’s initial asset holdings and utility function, he will value an asset at more or less than its expected value. Therefore, in private capital markets, investors do not choose investments to maximize the present value of expected returns, but to maximize the present value of returns properly adjusted for risk. The issue is whether it is appropriate to discount public investments in the same way as private investments.

74 citations


Book ChapterDOI
01 Jan 2014
TL;DR: The usual applications of the method of Lagrangian multipliers, used in locating constrained extrema (say maxima), involve the setting up of the Lagrangians expression, where f(x) is being (say) maximized with respect to the (vector) variable x = {x1, • • •, xN, subject to the constraint g(x)= O, where g (x) maps the points of the N-dimenaional x-space into an.M-dimensional space, and y ={y1,• • •
Abstract: The usual applications of the method of Lagrangian multipliers, used in locating constrained extrema (say maxima), involve the setting up of the Lagrangian expression, $$ \phi(x,y)=f(x)+y^{\prime}g(x), $$ where f(x) is being (say) maximized with respect to the (vector) variable x = {x1, • • •, xN}, subject to the constraint g(x)= O, where g(x) maps the points of the N-dimenaional x-space into an .M-dimensional space, and y ={y1, • • •, yM} is the Lagrange multiplier (vector).

65 citations


Posted Content
TL;DR: Costs of carbon emissions are being underestimated, but current estimates are still valuable for setting mitigation policy as discussed by the authors, but they need to be updated frequently and the current estimates may not be accurate enough.
Abstract: Costs of carbon emissions are being underestimated, but current estimates are still valuable for setting mitigation policy.

25 citations


Book ChapterDOI
01 Jan 2014
TL;DR: In this paper, the authors define functions with suitable differentiability properties, where fj(X)≥0 for all X, and define a set of vectors with components Xi, Yj.
Abstract: In the following, X and Y will be vectors with components Xi, Yj. By X ≥ 0 will be meant X ≥ 0 for all i. Let g(X), fj(X) (j=1, •••) be functions with suitable differentiability properties, where fj(X)≥0 for all X, and define \( {\rm F}(\rm X, Y)=g(X)+{\sum_{j=1}^{m}} Y_{j}\Big\{1-[{f_{j}}(X)]^{l+\eta} \Big\}\).

17 citations


Journal ArticleDOI
TL;DR: In this article, the authors explore the second approach and propose a number of tractable specifications leading to utility functions that are bounded both from above and below, which is intimately related to that of increasing relative risk aversion as first hypothesized by Arrow.
Abstract: Lotteries with infinite expected utility are inconsistent with the axioms of expected utility theory. To rule them out, either the set of permissible lotteries must be restricted (to exclude, at a minimum, “fat-tailed” distributions such as that underlying the St. Petersburg Paradox and power laws that are popular in models of climate change), or the utility function must be bounded. This note explores the second approach and proposes a number of tractable specifications leading to utility functions that are bounded both from above and below. This property is intimately related to that of increasing relative risk aversion as first hypothesized by Arrow (1965).

12 citations


Book ChapterDOI
31 Jan 2014

12 citations


01 Jan 2014
TL;DR: In this article, the authors consider the problem of identifying the contribution of any individual or institution in the development of economic analysis, which is a logical problem that applies to the study of all history, that is, the difficulty of the counterfactual.
Abstract: The topic of this paper immediately raises a serious methodological question: In what sense can we isolate the contribution of any individual or institution in the development of economic analysis? This is but one example of a fundamental logical problem that applies to the study of all history, that is, the difficulty of the counterfactual. For when you ask, “What is the influence of A (an event, an individual, an idea) on subsequent history?,” you mean to ask what would have happened had A not been there. There is no immediately apparent way to proceed to answer that question. Every now and then historians debate the meaning of interpretation; in recent years the so-called new economic history has been filled with controversy over just such issues.

8 citations


01 Mar 2014
TL;DR: The view that the real meaning of compelling values and norms, which might override the simple tastes of everyday life, arises in the context of society is advanced.
Abstract: I want to address myself to some aspects of the foundations of the nature of value conflicts, questions whose answers have very real consequences. We do make far-sighted decisions, decisions whose consequences run into the very distant future. A current example is the issue of climate change and appropriate policy responses. We are engaged; we have to think ahead and imagine what the human world will be like a hundred years from now and five hundred years from now, and how we are going to make the appropriate decisions today and anticipate those to be made in the future.There are two themes dominating these discussions. One is that the application of norms or values (I take these words as synonyms) and the conflicts arise in a social context, in interpersonal relationships. There is a strong tendency to talk about what's moral or what's appropriate for me. I think that is missing most of the issue.There is a second point, one I am going to mention only briefly. If we have a decision that resolves some conflict of norms, that decision has to be executed (as I will explain). Any serious decision is a complex plan. This means that it will have to be implemented in various circumstances, the implementation being frequently the responsibility of individual agents. Once it is understood that the information needed to carry out the decision depends on information that is dispersed and also that individual agents are different, we find that the possibilities of compromise are restricted, and therefore, irreconcilable situations are created, which might not appear in an ideal world.I am speaking as the representative of economics on this panel. As we see it, a choice is not something you do today in isolation; it is part of a plan that includes some choices to be made in the future. Even if one considers a single point of time, a choice is a vector. I can buy so much bread and so many shirts and choose a place to live. These choices are constrained in some way. If I consider the choice between going to the opera and going to a movie, I am constrained because I have time to do only one. In the full context, the fact that I am going to the opera next week may weigh in this decision. In general, any one component of the decision is conditional on the possibilities in other dimensions; if I am going to buy bread, I might want some butter or the modern healthier equivalent thereof.Hence, even in the most ordinary economic or other daily decisions, there are conflicts. Time available sets limits; so does income. The usual economic view is that these choices are mediated by some consistent underlying relationship among the alternatives. There is some comprehensive good that aggregates all the dimensions of the choices, which may be called "utility," or "well-being." It is a measure the individual seeks to increase to the extent possible within the constraints.Even within this individualistic context, there are some goals that are frequently regarded as higher. One might say that I "should" be concerned about my health, and therefore, I should be restrained from eating the chocolate cakes I love. Are these "norms"? Or merely a kind of "taste"?I want to advance the view that the real meaning of compelling values and norms, which might override the simple tastes of everyday life, arises in the context of society. We are engaged in relations with others. Partly, they are necessary relations; our well-being, however conceptualized, depends on others. A market, the economists' preferred mode of social interaction, is still a social organization, requiring social interaction. Cooperation takes many other forms, be it an irrigation system, or barn-raising, or a government. Perhaps the most important form of cooperation in human history has been the making of wars, from those between Neolithic villages to those on a world scale. Of course, war shows the moral ambiguity of norms.Norms thus exist and govern our behavior, though they might conflict with other criteria, other norms. …