Chris ~

2580 days ago

Arrow made his absurd assumptions in his model not because they reflected reality, or proved reliable in prediction, but to make the “system of equations mathematically cohere.” When the math fails to explain reality and predict events it is a grave error (rather than a cause for celebration) when economists assume out of existence reality and torture the model until the math “coheres.”

Bill Black: Kenneth Arrow’s (Ignored) Impossibility Theorem

nakedcapitalism.com

Yves here. For readers who (sensibly) have managed to avoid orthodox economics, Kenneth Arrow wasn’t merely a (Swedish Central Bank-so-called) Nobel Prize winner and Larry Summer’s uncle, but is most celebrated at the co-author of the Arrow-Debreu theorem. As we wrote in ECONNED: