From Arrow–Debreu to PPP–SIRRIPA: A Hierarchical Framework for Structural Equity Valuation, with CAPM and Fama–French as Reduced Models

This article proposes a hierarchical framework for structural equity valuation that reorders the main components of modern financial theory. At the foundational level, the Arrow–Debreu framework — developed by Nobel Prize laureates Kenneth Arrow and Gérard Debreu — defines prices as time-dated and state-contingent objects expressed in a common numéraire. Building on this foundation, the PPP–SIRRIPA framework is introduced as the structural valuation layer for equities, in which the risk-free rat