Robert Lucas Jr. | |
|---|---|
.jpg) Lucas in 1996 | |
| Born | Robert Emerson Lucas Jr. (1937-09-15)September 15, 1937 Yakima, Washington, U.S. |
| Died | May 15, 2023(2023-05-15) (aged 85) Chicago, Illinois, U.S. |
| Spouses | |
| Children | 2 |
| Academic background | |
| Education | University of Chicago (BA,PhD) |
| Doctoral advisor | |
| Academic work | |
| Discipline | Macroeconomics |
| School or tradition | New classical macroeconomics |
| Institutions | |
| Doctoral students | |
| Notable ideas | |
| Awards | Nobel Memorial Prize in Economic Sciences (1995) |
| Website | |
Robert Emerson Lucas Jr. (September 15, 1937 – May 15, 2023) was an American economist at theUniversity of Chicago. Widely regarded as the central figure in the development of thenew classical approach to macroeconomics,[1] he received theNobel Memorial Prize in Economic Sciences in 1995 "for having developed and applied the hypothesis ofrational expectations, and thereby having transformed macroeconomic analysis and deepened our understanding of economic policy".[2][3]N. Gregory Mankiw characterized him as "the most influential macroeconomist of the last quarter of the 20th century".[4] In 2020, he ranked as the 10th most cited economist in the world.[5]
Lucas was born on September 15, 1937, inYakima, Washington, as the eldest child of Robert Emerson Lucas and Jane Templeton Lucas.[6] His parents ran an ice creamery in Yakima. After the business failed during theGreat Depression, the family moved to Seattle. His mother worked as a fashion designer and his father worked at a shipbuilding yard and later worked as a welder with a refrigeration company.[7]
Lucas received his BA in history in 1959 from theUniversity of Chicago. Lucas attended theUniversity 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.[8] His dissertation,Substitution Between Labor and Capital in U.S. Manufacturing: 1929–1958, was written under the supervision ofH. Gregg Lewis andDale Jorgenson.[9] 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.[10]
Following his graduation, Lucas taught at theGraduate School of Industrial Administration (nowTepper School of Business) atCarnegie Mellon University until 1975, when he returned to theUniversity of Chicago.[11]
Lucas was elected to theAmerican Academy of Arts and Sciences in 1980,[12] aGuggenheim Fellowship and theNational Academy of Sciences in 1981,[13][14] and theAmerican Philosophical Society in 1997.[15] A collection of his papers is housed at the Rubenstein Library atDuke University.[16]
Lucas was awarded theNobel Memorial Prize in Economic Sciences in 1995. The citation noted that the prize was "for having developed and applied the hypothesis of rational expectations, and thereby having transformed macroeconomic analysis and deepened our understanding of economic policy".[17]
Lucas is well known for his investigations into the implications ofrational expectations in macroeconomic theory.John Muth had published "Rational Expectations and the Theory of Price Movements"[18] in 1961 at the same faculty in Carnegie Tech. Lucas (1972) incorporated the idea of rational expectations into a dynamic macroeconomic models. 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.[19] He also provided sound theoretical foundations toMilton Friedman andEdmund Phelps's view of the long-runneutrality of money, and provided an explanation for the then observed correlation between output and inflation, depicted by thePhillips curve, while illustrating that the existence of this empirical relationship did not yield a possibility of a policy trade off.[20]
In 1976, Lucas challenged the foundations of macroeconomic theory (previously dominated by theKeynesian economics approach),[21] arguing that amacroeconomic model should be built as an aggregated version ofmicroeconomic models while noting that aggregation in the theoretical sense may not be possible within a given model. He formulated the "Lucas critique" of economic policymaking,[22] 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. The reformulation influenced the development ofnew classical macroeconomics and the drive towardsmicroeconomic foundations for macroeconomic theory.[20][23]
Lucas developeda theory of supply that suggests people can be tricked by unsystematic monetary policy; theUzawa–Lucas model (withHirofumi 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.[24] Lucas andPaul Romer heralded the birth ofendogenous growth theory and the resurgence of research on economic growth in the late 1980s and the 1990s.[25][26]
Lucas also contributed foundational contributions to behavioral economics, and provided the intellectual foundation for the understanding of deviations from thelaw of one price based on the irrationality of investors.[20][27]
In 2003, he stated, about five years before theGreat Recession, that the "central problem of depression-prevention has been solved, for all practical purposes, and has in fact been solved for many decades."[28]
Lucas also proposed theLucas Wedge which tries to show how much higher GDP would be in the presence of proper policy.[29]
Lucas married an undergraduate classmate from theUniversity of Chicago, Rita Cohen. The couple had two sons, Stephen (born 1960) and Joseph (born 1966).[8]
Lucas and Cohen divorced in the 1980s. The divorce stipulation had a clause that entitled Cohen to half of his Nobel prize winnings if the prize were to be awarded before October 31, 1995, which ended up being the case.[7]
After his divorce from Cohen, Lucas marriedNancy Stokey.[6] The couple collaborated on papers ongrowth theory,public finance, andmonetary theory.
Lucas died in Chicago on May 15, 2023, at the age of 85.[6][30]
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includes the Prize Lecture on December 7, 1995Monetary Neutrality| Awards | ||
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| Preceded by | Laureate of the Nobel Memorial Prize in Economics 1995 | Succeeded by |
| Academic offices | ||
| Preceded by | President of theEconometric Society 1997 | Succeeded by |
| Preceded by | President of theAmerican Economic Association 2002–2003 | Succeeded by |
