Robert Lucas Jr.

{{Infobox economist

| name = Robert Lucas Jr.

| school_tradition = New classical macroeconomics

| image =La Revolución Industrial Pasado y Futuro, Robert E. Lucas Jr. screenshot (cropped).jpg

| image_size =

| caption =Lucas in 1996

| birth_name = Robert Emerson Lucas Jr.

| birth_date = {{Birth date|1937|9|15}}

| birth_place = Yakima, Washington, U.S.

| death_date = {{Death date and age|2023|5|15|1937|9|15}}

| death_place = Chicago, Illinois, U.S.

| institution = {{ubl|Carnegie Mellon University|University of Chicago}}

| field = Macroeconomics

| spouse = {{ubl|{{marriage|Rita Cohen|August 1959||end=divorced}}|Nancy Stokey}}

| children = 2

| doctoral_advisor = {{ubl|H. Gregg Lewis|Dale W. Jorgenson}}

| doctoral_students= {{ubl|{{ill|v=ib|Marcel Boyer|fr}}|Costas Azariadis|Jean-Pierre Danthine|Boyan Jovanovic|Paul Romer|Esteban Rossi-Hansberg|Benjamin Moll}}

| contributions = {{ubl|Rational expectations|Lucas critique}}

| awards = Nobel Memorial Prize in Economic Sciences (1995)

| signature =

| repec_prefix = e | repec_id = plu15

|education=University of Chicago (BA, PhD)}}

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,{{cite book |first1=Brian |last1=Snowdon |first2=Howard R. |last2=Vane |title=Modern Macroeconomics: Its Origin, Development and Current State |location=Cheltenham |publisher=Edgar Elgar |year=2005 |isbn=978-1-84542-208-0 |pages=220–223 |url=https://books.google.com/books?id=2OEPPVsIXcMC&pg=PA220 }} he received the Nobel Memorial Prize in Economic Sciences 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".{{Cite encyclopedia|url=https://www.britannica.com/biography/Robert-E-Lucas-Jr|title=Robert E. Lucas, Jr. {{!}} American economist|encyclopedia=Encyclopedia Britannica|access-date=August 2, 2017|language=en}}{{cite web|url=http://nobelprize.org/nobel_prizes/economics/laureates/1995/|title=The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1995|publisher=Nobel Foundation|access-date=October 14, 2008}} N. Gregory Mankiw characterized him as "the most influential macroeconomist of the last quarter of the 20th century".{{cite news|last=Mankiw|first=N. Gregory|title=Back In Demand|url=https://online.wsj.com/news/articles/SB10001424052970204518504574417810281734756|newspaper=Wall Street Journal|date=September 21, 2009}} In 2020, he ranked as the 10th most cited economist in the world.{{cite web |url=https://ideas.repec.org/top/top.person.all.html |title=Top 10% Authors, as of July 2020 |website=IDEAS/RePEc |publisher=Research Papers in Economics |archive-url=https://web.archive.org/web/20200823142220/https://ideas.repec.org/top/top.person.all.html |location=Archived by the Wayback Machine |access-date=21 May 2023 |archive-date=23 August 2020 }}

Early life and education

Lucas was born on September 15, 1937, in Yakima, Washington, as the eldest child of Robert Emerson Lucas and Jane Templeton Lucas.{{cite news|url = https://www.nytimes.com/2023/05/17/business/economy/robert-e-lucas-jr-dead.html|title = Robert E. Lucas Jr., Nobel-Winning Conservative Economist, Dies at 85|newspaper = The New York Times|date = May 17, 2023|accessdate = May 17, 2023|last = Roberts|first = Sam|author-link=Sam Roberts (newspaper journalist)|url-access = limited}} His parents ran an ice creamery in Yakima. After the business failed during the Great 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.{{Cite news |last=Langer |first=Emily |date=2023-05-19 |title=Robert E. Lucas Jr., Nobel Prize–winning economist, dies at 85 |language=en-US |newspaper=The Washington Post |url=https://www.washingtonpost.com/obituaries/2023/05/19/robert-lucas-nobel-economics-dead/ |access-date=2023-05-20 |issn=0190-8286}}

Lucas received his BA 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.{{Cite web|url=https://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1995/lucas-bio.html|title=Robert E. Lucas Jr. – Biographical|last=Lucas|first=Robert E.|publisher=Nobel Foundation|access-date=November 16, 2016|location=Stockholm|editor-last=Frängsmyr|editor-first=Tore|editor-link=Tore Frängsmyr}} 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.{{cite journal|last=Andrada|first=Alexandre F. S.|journal=EconomiA|title=Understanding Robert Lucas (1967–1981): His Influence and Influences|ssrn=2515932|doi=10.1016/j.econ.2016.09.001|doi-access=free|volume=18|issue=2|date=May–August 2017|pages=212–228|hdl=10419/179646|hdl-access=free}} 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.{{cite AV media|last=Roberts|first=Russ|title=Bob Lucas on Growth, Poverty and Business Cycles|url=http://www.econtalk.org/archives/_featuring/bob_lucas/|work=EconTalk|publisher=Library of Economics and Liberty|author-link=Russ Roberts|date=February 5, 2007|access-date=May 18, 2023}}

Career

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.{{cite book|last=Pressman|first=Steven|author-link=Steven Pressman (economist)|title=Fifty Major Economists |url=https://archive.org/details/fiftymajoreconom00pres_478 |url-access=limited |pages=193–197 |location=London |publisher=Routledge|year=1999 |isbn=9780415134811}}

Lucas was elected to the American Academy of Arts and Sciences in 1980,{{Cite web|title=Robert Emerson Lucas|url=https://www.amacad.org/person/robert-emerson-lucas|access-date=December 10, 2021|website=American Academy of Arts & Sciences|language=en}} a Guggenheim Fellowship and the National Academy of Sciences in 1981,{{cite web|url=https://www.gf.org/fellows/robert-e-lucas-jr/|title=Robert E. Lucas Jr.|publisher=John Simon Guggenheim Memorial Foundation|access-date=May 18, 2023}}{{Cite web|title=Robert E. Lucas, Jr.|url=http://www.nasonline.org/member-directory/members/53109.html|access-date=December 10, 2021|publisher=National Academy of Sciences}} and the American Philosophical Society in 1997.{{Cite web|title=APS Member History|url=https://search.amphilsoc.org/memhist/search?creator=Robert+E.+Lucas&title=&subject=&subdiv=&mem=&year=&year-max=&dead=&keyword=&smode=advanced|access-date=December 10, 2021|publisher=American Philosophical Society}} A collection of his papers is housed at the Rubenstein Library at Duke University.{{cite web |url=http://library.duke.edu/rubenstein/findingaids/lucasrobert/ |title=Robert E. Lucas papers, 1960–2011 and undated|publisher=David M. Rubenstein Rare Book & Manuscript Library|access-date=May 18, 2023}}

Lucas was awarded the Nobel 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".{{Cite web |title=The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1995 |url=https://www.nobelprize.org/prizes/economic-sciences/1995/summary/ |access-date=2023-05-20 |website=NobelPrize.org |language=en-US}}

Research contributions

=Rational expectations=

Lucas is well known for his investigations into the implications of rational expectations in macroeconomic theory. 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.Federal Reserve Bank of Minneapolis. "With inflation front and center, work that launched rational expectations revolution still resonates." Published 2022. Accessed December 27, 2024. Available at: https://www.minneapolisfed.org/article/2022/with-inflation-front-and-center-work-that-launched-rational-expectations-revolution-still-resonates He also provided sound theoretical foundations to Milton Friedman and Edmund Phelps's view of the long-run neutrality of money, and provided an explanation for the then observed correlation between output and inflation, depicted by the Phillips curve, while illustrating that the existence of this empirical relationship did not yield a possibility of a policy trade off.

=Lucas critique=

In 1976, Lucas challenged the foundations of macroeconomic theory (previously dominated by the Keynesian economics approach),{{Cite book |last1=Lucas |first1=Robert |title=The Phillips Curve and Labor Markets |publisher=American Elsevier |year=1976 |isbn=0-444-11007-0 |editor1-last=Brunner |editor1-first=K. |editor1-link=Karl Brunner (economist) |series=Carnegie-Rochester Conference Series on Public Policy |volume=1 |location=New York |pages=19–46 |chapter=Econometric Policy Evaluation: A Critique |editor2-last=Meltzer |editor2-first=A. |chapter-url=http://people.sabanciuniv.edu/atilgan/FE500_Fall2013/2Nov2013_CevdetAkcay/LucasCritique_1976.pdf |archive-url=https://web.archive.org/web/20211105020853/http://people.sabanciuniv.edu/atilgan/FE500_Fall2013/2Nov2013_CevdetAkcay/LucasCritique_1976.pdf |archive-date=2021-11-05 |url-status=live}} 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 formulated 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. The reformulation influenced the development of new classical macroeconomics and the drive towards microeconomic foundations for macroeconomic theory.{{Cite web|url=http://policonomics.com/lp-ncm-robert-lucas/|title=New Classical Macroeconomics: Robert Lucas |website=policonomics.com|date=October 8, 2012 |language=en-US|access-date=August 2, 2017}}

=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.{{cite book |last1=Blanchard |first1=Olivier Jean |title=Lectures on Macroeconomics |last2=Fischer |first2=Stanley |publisher=MIT Press |year=1989 |isbn=978-0-262-02283-5 |location=Cambridge |pages=356–360 [p. 358] |chapter=The Lucas Model |author-link=Olivier Blanchard |author-link2=Stanley Fischer |chapter-url={{Google books |plainurl=yes |id=j_zs7htz9moC |page=358 }}}} 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.{{Cite web |title=Paul Romer: Ideas, Nonrivalry, and Endogenous Growth |url=https://www-leland.stanford.edu/~chadj/RomerNobel.pdf |archive-url=https://web.archive.org/web/20200503224515/http://www-leland.stanford.edu/~chadj/RomerNobel.pdf |archive-date=2020-05-03 |url-status=live}}{{Citation |last=Barseghyan |first=Levon |title=Lucas, Robert (Born 1937) |date=2016 |url=https://doi.org/10.1057/978-1-349-95121-5_2728-1 |work=The New Palgrave Dictionary of Economics |pages=1–6 |access-date=2023-05-20 |place=London |publisher=Palgrave Macmillan UK |language=en |doi=10.1057/978-1-349-95121-5_2728-1 |isbn=978-1-349-95121-5}}

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.{{Cite journal |last=Svensson |first=Lars E. O. |date=1996 |title=The Scientific Contributions of Robert E. Lucas, Jr. |url=https://www.jstor.org/stable/3440576 |journal=The Scandinavian Journal of Economics |volume=98 |issue=1 |pages=1–10 |doi=10.2307/3440576 |jstor=3440576 |issn=0347-0520}}{{Cite web |title=The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1995 |url=https://www.nobelprize.org/prizes/economic-sciences/1995/advanced-information/ |access-date=2023-05-20 |website=NobelPrize.org |language=en-US}}

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."{{cite news| url=https://www.nytimes.com/2009/01/05/opinion/05krugman.html?_r=0 | work=The New York Times | title=Fighting Off Depression | date=January 4, 2009}}

Lucas also proposed the Lucas Wedge which tries to show how much higher GDP would be in the presence of proper policy.{{Cite web |title=What Is a Lucas Wedge? |url=https://www.investopedia.com/terms/l/lucas_wedge.asp |access-date=2023-05-20 |website=Investopedia |language=en}}

Personal life

Lucas married an undergraduate classmate from the University of Chicago, Rita Cohen. The couple had two sons, Stephen (born 1960) and Joseph (born 1966).

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.

After his divorce from Cohen, Lucas married Nancy Stokey. The couple collaborated on papers on growth theory, public finance, and monetary theory.

Lucas died in Chicago on May 15, 2023, at the age of 85.{{cite web |last1=Lee |first=Tori |last2=Witynski |first2=Max |date=May 16, 2023 |title=Robert E. Lucas Jr., Nobel laureate and pioneering economist, 1937–2023 |url=https://news.uchicago.edu/story/robert-e-lucas-jr-nobel-laureate-and-pioneering-economist-1937-2023 |access-date=May 18, 2023 |publisher=University of Chicago}}

Bibliography

{{cite journal|author=Lucas, Robert|title=Expectations and the Neutrality of Money|journal=Journal of Economic Theory|year=1972|volume=4|issue=2|pages=103–24|doi=10.1016/0022-0531(72)90142-1|citeseerx=10.1.1.592.6178}}
{{cite journal |author=Lucas, Robert |title=Econometric Policy Evaluation: A Critique |journal=Carnegie-Rochester Conference Series on Public Policy |year=1976 |volume=1 |pages=19–46 |doi=10.1016/S0167-2231(76)80003-6|citeseerx=10.1.1.726.1610 }}
{{cite journal |author=Lucas, Robert |title=On the Mechanics of Economic Development |journal=Journal of Monetary Economics |year=1988 |volume=22 |issue=1 |pages=3–42 |doi=10.1016/0304-3932(88)90168-7|s2cid=154875771 }}
{{cite journal |author=Lucas, Robert |title=Why Doesn't Capital Flow from Rich to Poor Countries |journal=American Economic Review |year=1990 |volume=80 |issue=2 |pages=92–96 |jstor=2006549}}
{{cite book |author=Lucas, Robert |title=Studies in Business-Cycle Theory |publisher=MIT Press |year=1981 |isbn=978-0-262-62044-4 |url-access=registration |url=https://archive.org/details/studiesinbusines00luca }}
Lucas, Robert (1995). [https://www.nobelprize.org/uploads/2018/06/lucas-lecture.pdf "Monetary Neutrality"]. Prize Lecture, 1995 Nobel Prize in Economics, December 7, 1995,
Stokey, Nancy; Robert Lucas; and Edward Prescott (1989), Recursive Methods in Economic Dynamics, Harvard University Press, {{ISBN|0-674-75096-9}}.
{{cite book |last1=Lucas |first1=Robert E. Jr. |chapter=The History and Future of Economic Growth |title=The 4% Solution: Unleashing the Economic Growth America Needs |editor1-first=Brendan |editor1-last=Miniter |location=New York |publisher=Crown Business |date=2012 |isbn=978-0-307-98614-6 |pages=27–41 |url=https://books.google.com/books?id=hOs1RR1EZ3gC&q=%22The+History+and+Future+of+Economic+Growth%22 |language=en }}
{{cite journal |last1=Lucas |first1=Robert E. Jr. |last2=Moll |first2=Benjamin |date=October 2011 |title=Knowledge Growth and the Allocation of Time |url=https://www.nber.org/papers/w17495 |publisher=National Bureau of Economic Research |series=Working Paper Series no. 17495 |doi=10.3386/w17495 |doi-access=free |access-date=April 9, 2019}}
{{Cite journal |last1=Lucas |first1=Robert E. Jr. |last2=Moll |first2=Benjamin |date=February 2014 |title=Knowledge Growth and the Allocation of Time |url=https://www.journals.uchicago.edu/doi/10.1086/674363 |url-access=subscription |journal=Journal of Political Economy |volume=122 |issue=1 |pages=1–51 |doi=10.1086/674363|s2cid=6319313 }}

Notes

References

{{cite book |last=Galbács |first=Peter |title=The Theory of New Classical Macroeconomics: A Positive Critique |location=Heidelberg/New York/Dordrecht/London |publisher=Springer |year=2015 |isbn= 978-3-319-17578-2|doi=10.1007/978-3-319-17578-2|series=Contributions to Economics }}
{{cite book |last=Kasper |first=Sherryl |title=The Revival of Laissez-Faire in American Macroeconomic Theory: A Case Study of Its Pioneers |chapter=Robert E. Lucas, Jr and new classical economics |publisher=Edward Elgar |year=2002 |isbn=9781843765608 |chapter-url=https://books.google.com/books?id=TBUqu6hiHLgC&pg=PA127 }}

External links

[https://web.archive.org/web/20080705164017/http://home.uchicago.edu/%7Esogrodow Robert E. Lucas Jr.'s website at University of Chicago]
{{Nobelprize|namn=Robert E. Lucas Jr.}} includes the Prize Lecture on December 7, 1995 Monetary Neutrality
[https://web.archive.org/web/20051224133028/http://ca.geocities.com/econ_0909meet/lucas-autobio.html Robert E. Lucas Jr. – Autobiography]
[http://nobelprize.org/nobel_prizes/economics/laureates/1995/press.html Nobel Prize Press Release]
[https://ideas.repec.org/e/plu15.html IDEAS/RePEc]
[https://web.archive.org/web/20090911005106/http://blogs.channel4.com/snowblog/2009/09/08/chicago-defends-itself-against-keynesian-attacks/ Interview on] Channel 4
[https://www.wsj.com/articles/SB10001424053111904194604576583382550849232?mod=rss_opinion_main/ Chicago Economics on Trial ]
{{Cite encyclopedia |title=Robert E. Lucas Jr. (1937– ) |url=http://www.econlib.org/library/Enc/bios/Lucas.html |encyclopedia=The Concise Encyclopedia of Economics |edition=2nd |series=Library of Economics and Liberty |publisher=Liberty Fund |year=2008 }}
[https://www.ubs.com/microsites/nobel-perspectives/en/laureates/robert-lucas.html Interviews with Robert Lucas as part of the Nobel Perspectives project]