Arrow, along with Debreu, initiated modern general equilibrium theory in their landmark 1954 paper. The importance of rigorous analysis to economics is nowhere so highlighted as in this subject. On the one hand, economists had long been used to haphazard reasoning ranging from a naive belief that any economic system of importance had to have a solution to the slightly more methodical approach of the counting of equations and unknowns. On the other hand, a major benefit of Arrow and Debreu's work was the realization that the conditions for existence were strikingly restrictive. In particular, the importance of convexity to the existence of equilibrium was first recognized by them. For example, convexity is rarely true of the individual firm's technology set, and so the importance of large numbers of agents as a precondition for the workability of competition is now better understood.

A third major use of the Arrow-Debreu model is in applications. Once the way was paved in the abstract setting, countless papers utilized the basic framework and methods to extend the analysis to a variety of more concrete settings. Chichilnisky's contribution is a good example. She examines a general equilibrium model of international trade intended to represent an advanced industrial nation trading with a less developed country rich in resources. Under more general assumptions than heretofore considered, she shows that it is possible that trade will lower the real wages and the welfare of workers in the labor-abundant country.