Robert Lucas Jr. facts for kids
Quick facts for kids
Robert Lucas Jr.
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Lucas in 1996
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Robert Emerson Lucas Jr.
September 15, 1937 Yakima, Washington, U.S.
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| Died | May 15, 2023 (aged 85) Chicago, Illinois, U.S.
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| Field | Macroeconomics |
| School or tradition |
New classical macroeconomics |
| Alma mater | University of Chicago (BA, PhD) |
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| Awards | Nobel Memorial Prize in Economic Sciences (1995) |
| Information at IDEAS / RePEc | |
Robert Emerson Lucas Jr. (September 15, 1937 – May 15, 2023) was an American economist at the University of Chicago. Widely regarded as the central figure in the development of the new classical approach to macroeconomics, he received the Nobel Prize in Economics in 1995 "for having developed and applied the hypothesis of rational expectations, and thereby having transformed macroeconomic analysis and deepened our understanding of economic policy". He was characterized by N. Gregory Mankiw as "the most influential macroeconomist of the last quarter of the 20th century." In 2020, he ranked as the 11th most cited economist in the world.
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Biography
Lucas was born on September 15, 1937, in Yakima, Washington, as the eldest child of Robert Emerson Lucas and Jane Templeton Lucas.
Lucas received his B.A. in History in 1959 from the University of Chicago. Lucas attended the University of California, Berkeley, as a first-year graduate student, but he left Berkeley due to financial reasons and returned to Chicago in 1960, where he earned a PhD in Economics in 1964. His dissertation "Substitution between Labor and Capital in U.S. Manufacturing: 1929–1958" was written under the supervision of H. Gregg Lewis and Dale Jorgenson. Lucas studied economics for his PhD on "quasi-Marxist" grounds. He believed that economics was the true driver of history, and so he planned to immerse himself fully in economics and then return to the history department.
Following his graduation, Lucas taught at the Graduate School of Industrial Administration (now Tepper School of Business) at Carnegie Mellon University until 1975, when he returned to the University of Chicago.
Lucas was elected to the American Academy of Arts and Sciences in 1980, the National Academy of Sciences in 1981, and the American Philosophical Society in 1997.
After his divorce from Rita Cohen, he married Nancy Stokey. The couple collaborated on papers on growth theory, public finance, and monetary theory. Lucas had two sons with Cohen: Stephen (born 1960) and Joseph (born 1966).
A collection of his papers is housed at the Rubenstein Library at Duke University.
Contributions
Rational expectations
Lucas is well known for his investigations into the implications of the assumption of the rational expectations theory. Lucas (1972) incorporates the idea of rational expectations into a dynamic general equilibrium model. The agents in Lucas's model are rational: based on the available information, they form expectations about future prices and quantities, and based on these expectations they act to maximize their expected lifetime utility. He also provided sound theory fundamental to Milton Friedman and Edmund Phelps's view of the long-run neutrality of money, and provide an explanation of the correlation between output and inflation, depicted by the Phillips curve.
Lucas critique
Lucas (1976) challenged the foundations of macroeconomic theory (previously dominated by the Keynesian economics approach), arguing that a macroeconomic model should be built as an aggregated version of microeconomic models while noting that aggregation in the theoretical sense may not be possible within a given model. He developed the "Lucas critique" of economic policymaking, which holds that relationships that appear to hold in the economy, such as an apparent relationship between inflation and unemployment, could change in response to changes in economic policy. That led to the development of new classical macroeconomics and the drive towards microeconomic foundations for macroeconomic theory.
Other contributions
Lucas developed a theory of supply that suggests people can be tricked by unsystematic monetary policy; the Uzawa–Lucas model (with Hirofumi Uzawa) of human capital accumulation; and the "Lucas paradox", which considers why more capital does not flow from developed countries to developing countries. Lucas (1988) is a seminal contribution in the economic development and growth literature. Lucas and Paul Romer heralded the birth of endogenous growth theory and the resurgence of research on economic growth in the late 1980s and the 1990s.
Lucas also contributed foundational contributions to behavioral economics, and provided the intellectual foundation for the understanding of deviations from the law of one price based on the irrationality of investors.
In 2003, he stated, about five years before the Great Recession, that the "central problem of depression-prevention has been solved, for all practical purposes, and has in fact been solved for many decades."
Lucas also proposed the Lucas Wedge which tries to show how much higher GDP would be in the presence of proper policy.
Death
Lucas died May 15, 2023, at the age of 85.
See also
In Spanish: Robert Lucas para niños
