Showing papers in "Journal of Economic Theory in 1972"

TL;DR: In this article, the authors provide a simple example of an economy in which equilibrium prices and quantities exhibit what may be the central feature of the modern business cycle: a systematic relation between the rate of change in nominal prices and the level of real output.

TL;DR: In this paper, Arrow has demonstrated that when externalities are present in a general equilibrium system, a suitable expansion of the commodity space would lead to Pareto optimality by bringing externalities under the control of the price system.

TL;DR: In this paper, the authors examined the effects of increased uncertainty in future output prices, wage rates, and investment costs on the quantity of investment undertaken by a firm and found that current investment does not decrease with increased uncertainty.

TL;DR: In this paper, the authors show that unless perfect knowledge of all variables, present and future, were known with complete certainty, and unless all decisions were made with exactness, economies of the one-sector deterministic type would lead at best to suboptimal consumption and investment policies.

TL;DR: In this paper, the authors present a derivation of a (local) measure of risk aversion for delayed risks which, like the Pratt measure in the timeless context, represents twice the risk premium per unit of variance for infinitesimal risks.

TL;DR: In this article, the authors define pollution as any stock or flow of physical substances which impairs man's capacity to enjoy life, and propose a model to deal with these complex and intractable matters.

TL;DR: In this article, the authors consider the following idealized description of an economy's behavior over time: In each period the labor force works with several different types of capital stocks to produce several types of output.

TL;DR: A version of Arrow's General Possibility Theorem is proved without assuming either the Pareto Principle or its antecedents, the Positive Association of Social and Individual Values, and Citizens' Sovereignty as discussed by the authors.

TL;DR: The modern theory of risk-bearing, as introduced by Arrow [1], Baudier [3] and Debreu [4], although fully general, gives no direct justification for a proposition that common sense suggests: an optimal allocation of resources typically requires that firms ought to maximise the expected value of their profits, and a contrario risk aversion at the level of the individual firm is detrimental to efficiency.

TL;DR: In this article, the authors take a simple model and show how much of an increase in welfare might be available if subtle theory were substituted for crude as the basis for economic policy, or if more elaborate model formulation replaced simple calculations.

TL;DR: A more general form, the effectiveness form, is proposed to correct the inadequacies of the characteristic-function representation and concepts of stability for effectiveness-form games are suggested; and some examples are studied.

TL;DR: In this paper, it was shown that a consistent subset of the conditions which Kenneth Arrow imposed on a social welfare function, to obtain the General Possibility Theorem, imply that the social welfare functions is a voting process of a certain type which can be interpreted as a cooperative game.