Aldin U.

Rabusa November 12, 2018

ABM 12-12 Economics

Contemporary Economists and their

Contributions to Mankind

 Kenneth Arrow (b. 1921) is the preeminent living mathematical economist, bringing
high-powered mathematics to bear on long-standing economic questions, especially in
connection to general equilibrium

His findings are very helpful in an economy since general equilibrium theory explains the
behavior of supply, demand, and prices in a whole economy with several or many interacting
markets. It recognises the fact that economic system is a network in which all the parts are
mutually dependent on one another and in mutual interaction with one another.

 Gary Becker (b. 1930) merged sociology and economics, showing how sociological
factors influence economic behavior, while also laying particular stress on human
capital.

He analyzed that the global evolution of social and economic environment over time establishes
a direct correlation between human development and economic welfare. This is important since
it explains the correlation between the social factors and the economic growth which reveals the
impact of human development upon the economic development, both through direct and indirect
mechanisms. Both cultural and demographic factors have specific influences on the economy.
More specifically, the culture defines the way population’s preferences, the way they take
decision, the perception upon living and the perspective for the futures.

 Barbara Bergmann (b. 1927) laid the foundations for much of contemporary feminist
economics, especially regarding discrimination in the workplace.

This greatly contributes to women who are still struggling to get a pleasant job which doesn’t
judge their abilities’ capacity to their gender. Because of this more companies are now highly
aware that supporting female leadership and fostering gender equality is an absolute must in
today’s work environment. With more businesses jumping on the gender-equality bandwagon,
it’s easier to see the data behind the importance of women in the workforce.

 Francis Fukuyama (b. 1952) is a political economist who tracks how economic,
technological, and social forces facilitate as well as undercut liberal democracy.

His contribution is very important since it tracks how these forces facilitate which make us aware
what really is happening on our economy. Economic literacy also gives people the tools
for understanding their economic world and how to interpret events that will either directly or
indirectly affect them. Nations benefit from having an economically literate population because it
improves the public's ability to comprehend and evaluate critical issues.
  Lawrence Robert Klein (b. 1920), one of the 20th century’s key econometricians, was
the first to make significant use of computer modeling in economic forecasting.

Computers nowadays are often used in making complicated investment decisions. His
contribution explains the development of sophisticated computer equipment and its increased
usefulness of computer-based analysis to complex decisions. The computer system provides
daily worldwide exposure reports, facilitating centralized exposure management, aggressive
leading and lagging strategies and substantial savings on holding costs each year, which is an
impossible chore without a computer.

 Arthur Laffer (b. 1940), one of the chief architects of Ronald Reagan’s economic
policies, is best known for the “Laffer Curve,” which purports to demonstrate that
decreasing tax rates may increase tax revenues.

This shows how tax rate cuts affect revenues in two ways. Every tax rate cut translates directly
to less government revenue but in the longer term, puts more money in the hands of taxpayers,
increasing their disposable income. Hence, business activity increases, companies hire more,
who in turn spend more, and this leads to economic growth. The growth creates a higher tax
base and generates higher revenue in the long term.

 Elinor Ostrom (b. 1933) has focused on the means of ensuring the continued use of
common pool resources with an eye on preventing ecosystem collapse, a major concern
in these times of ever increasing population.

This is efficient especially in times of population growth which have an increasing demand for
food; resources are stressed till the limits of their capacity. Because no matter if water
resources, agricultural land, fishing grounds or forests, the sustainable management of
resources is at the core of long lasting food security. In order to maximize the yield of a
resource, users depart from traditional methods of management which proved to be successful
since centuries.

 Amartya Sen (b. 1933), called the “Mother Teresa of Economics,” has humanized the
once dismal science, focusing on practical economic ways of redressing poverty and
thereby alleviating human suffering.

Sen’s contribution is very important since he pointed out that poverty sometimes occurred even
when there was no decline in food output. Some famines occurred when the real income of
specific groups fell so that these groups could no longer afford to buy food. In such cases, most
economists would advocate giving money to such people so that they could buy food and make
their own trade-offs between food and other things.