Robert Emerson Lucas Jr. (born September 15, 1937) is an American
economist
An economist is a professional and practitioner in the social sciences, social science discipline of economics.
The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...
at the
University of Chicago
The University of Chicago (UChicago, Chicago, U of C, or UChi) is a private research university in Chicago, Illinois. Its main campus is located in Chicago's Hyde Park neighborhood. The University of Chicago is consistently ranked among the b ...
, where he is currently the John Dewey Distinguished Service Professor Emeritus in Economics and the College. Widely regarded as the central figure in the development of the
new classical approach to macroeconomics, he received the
Nobel Prize in Economics
The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...
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 has been characterized by
N. Gregory Mankiw
Nicholas Gregory Mankiw (; born February 3, 1958) is an American macroeconomist who is currently the Robert M. Beren Professor of Economics at Harvard University. Mankiw is best known in academia for his work on New Keynesian economics.
Mankiw h ...
as "the most influential macroeconomist of the last quarter of the 20th century." As of 2020, he ranks as the 11th most cited economist in the world.
Biography
Lucas was born in 1937 in
Yakima, Washington
Yakima ( or ) is a city in and the county seat of Yakima County, Washington, and the state's 11th-largest city by population. As of the 2020 census, the city had a total population of 96,968 and a metropolitan population of 256,728. The uninco ...
, and was the eldest child of Robert Emerson Lucas and Jane Templeton Lucas.
Lucas received his
B.A.
Bachelor of arts (BA or AB; from the Latin ', ', or ') is a bachelor's degree awarded for an undergraduate program in the arts, or, in some cases, other disciplines. A Bachelor of Arts degree course is generally completed in three or four yea ...
in
History
History (derived ) is the systematic study and the documentation of the human activity. The time period of event before the History of writing#Inventions of writing, invention of writing systems is considered prehistory. "History" is an umbr ...
in 1959 from the
University of Chicago
The University of Chicago (UChicago, Chicago, U of C, or UChi) is a private research university in Chicago, Illinois. Its main campus is located in Chicago's Hyde Park neighborhood. The University of Chicago is consistently ranked among the b ...
. Lucas attended the
University of California, Berkeley
The University of California, Berkeley (UC Berkeley, Berkeley, Cal, or California) is a public land-grant research university in Berkeley, California. Established in 1868 as the University of California, it is the state's first land-grant u ...
as a first-year graduate student, but he left Berkeley due to financial reasons and returned to Chicago in 1960, earning a
PhD in
Economics
Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services.
Economics focuses on the behaviour and intera ...
in 1964.
His dissertation "Substitution between Labor and Capital in U.S. Manufacturing: 1929–1958" was written under the supervision of
H. Gregg Lewis
Harold Gregg Lewis (May 9, 1914 – January 25, 1992) was an Americans, American economist notable for his contributions in labor economics. He was considered a principal member of the monetarist, free-market-oriented Chicago school of economics. ...
and
Dale Jorgenson
Dale Weldeau Jorgenson (May 7, 1933 – June 8, 2022) was the Samuel W. Morris University Professor at Harvard University, teaching in the department of economics and John F. Kennedy School of Government. He served as chairman of the departmen ...
. 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
The Tepper School of Business is the business school of Carnegie Mellon University. It is located in the university's campus in Pittsburgh, Pennsylvania, US.
The school offers degrees from the undergraduate through doctoral levels, in addition t ...
(now
Tepper School of Business
The Tepper School of Business is the business school of Carnegie Mellon University. It is located in the university's campus in Pittsburgh, Pennsylvania, US.
The school offers degrees from the undergraduate through doctoral levels, in addition ...
) at
Carnegie Mellon University
Carnegie Mellon University (CMU) is a private research university in Pittsburgh, Pennsylvania. One of its predecessors was established in 1900 by Andrew Carnegie as the Carnegie Technical Schools; it became the Carnegie Institute of Technology ...
until 1975, when he returned to the
University of Chicago
The University of Chicago (UChicago, Chicago, U of C, or UChi) is a private research university in Chicago, Illinois. Its main campus is located in Chicago's Hyde Park neighborhood. The University of Chicago is consistently ranked among the b ...
.
Lucas was elected to the
American Academy of Arts and Sciences
The American Academy of Arts and Sciences (abbreviation: AAA&S) is one of the oldest learned societies in the United States. It was founded in 1780 during the American Revolution by John Adams, John Hancock, James Bowdoin, Andrew Oliver, and ...
in 1980, the
National Academy of Sciences
The National Academy of Sciences (NAS) is a United States nonprofit, non-governmental organization. NAS is part of the National Academies of Sciences, Engineering, and Medicine, along with the National Academy of Engineering (NAE) and the Nati ...
in 1981, and the
American Philosophical Society
The American Philosophical Society (APS), founded in 1743 in Philadelphia, is a scholarly organization that promotes knowledge in the sciences and humanities through research, professional meetings, publications, library resources, and communit ...
in 1997.
After his divorce from Rita Lucas, he married
Nancy Stokey
Nancy Laura Stokey (born May 8, 1950) has been the Frederick Henry Prince Distinguished Service Professor of Economics at the University of Chicago since 1990 and focuses particularly on mathematical economics while recently conducting research a ...
. They have collaborated in papers on
growth theory
Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of ...
,
public finance
Public finance is the study of the role of the government in the economy. It is the branch of economics that assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achie ...
, and
monetary theory
Monetary economics is the branch of economics that studies the different competing theories of money: it provides a framework for analyzing money and considers its functions (such as medium of exchange, store of value and unit of account), and it ...
. Lucas has two sons: Stephen Lucas and Joseph Lucas.
A collection of his papers is housed at the Rubenstein Library at
Duke University
Duke University is a private research university in Durham, North Carolina. Founded by Methodists and Quakers in the present-day city of Trinity in 1838, the school moved to Durham in 1892. In 1924, tobacco and electric power industrialist James ...
.
Contributions
Rational expectations
Lucas is well known for his investigations into the implications of the assumption of the
rational expectations
In economics, "rational expectations" are model-consistent expectations, in that agents inside the model
A model is an informative representation of an object, person or system. The term originally denoted the plans of a building in late 16 ...
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
Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the ...
and
Edmund Phelps
Edmund Strother Phelps (born July 26, 1933) is an American economist and the recipient of the 2006 Nobel Memorial Prize in Economic Sciences.
Early in his career, he became known for his research at Yale's Cowles Foundation in the first half of ...
'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
The Phillips curve is an economic model, named after William Phillips hypothesizing a correlation between reduction in unemployment and increased rates of wage rises within an economy. While Phillips himself did not state a linked relationship ...
.
Lucas critique
Lucas (1976) challenged the foundations of macroeconomic theory (previously dominated by the
Keynesian economics
Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output an ...
approach), arguing that a
macroeconomic model
A macroeconomic model is an analytical tool designed to describe the operation of the problems of economy of a country or a region. These models are usually designed to examine the comparative statics and dynamics of aggregate quantities such as ...
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
The Lucas critique, named for American economist Robert Lucas's work on macroeconomic policymaking, argues that it is naive to try to predict the effects of a change in economic policy entirely on the basis of relationships observed in historic ...
" 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
New classical macroeconomics, sometimes simply called new classical economics, is a school of thought in macroeconomics that builds its analysis entirely on a neoclassical economics, neoclassical framework. Specifically, it emphasizes the importa ...
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
was a Japanese economist.
Biography
Uzawa was born on July 21, 1928 in Yonago, Tottori to a farming family.
He attended the Tokyo First Middle School (currently the Hibiya High School ) and the First Higher School, Japan (now the University ...
) 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
Paul Michael Romer (born November 6, 1955) is an American economist and policy entrepreneur who is a University Professor in Economics at New York University. Romer is best known as the former Chief Economist of the World Bank and for co-recei ...
heralded the birth of
endogenous growth theory
Endogenous growth theory holds that economic growth is primarily the result of endogenous and not external forces. Endogenous growth theory holds that investment in human capital, innovation, and knowledge are significant contributors to econom ...
and the resurgence of research on
economic growth
Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of ...
in the late 1980s and the 1990s.
He also contributed foundational contributions to behavioral economics, and provided the intellectual foundation for the understanding of deviations from the
law of one price
The law of one price (LOOP) states that in the absence of trade frictions (such as transport costs and tariffs), and under conditions of free competition and price flexibility (where no individual sellers or buyers have power to manipulate prices ...
based on the irrationality of investors.
In 2003, he stated, about 5 years before the
Great Recession
The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...
, that the "central problem of depression-prevention has been solved, for all practical purposes, and has in fact been solved for many decades."
He also proposed the
Lucas Wedge
The Lucas wedge is an economic measure of how much higher the gross domestic product would have been if it grew as fast as it should have. It shows the loss from deadweight caused by poor or inefficient economic policy choices. A Lucas wedge was na ...
which tries to show how much higher GDP would be in the presence of proper policy.
Bibliography
*
*
*
*
*
* Lucas, Robert (1995) â€
"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, .
*Lucas, Robert E. Jr. "The History and Future of Economic Growth", ''
The 4% Solution: Unleashing the Economic Growth America Needs'', edited by Brendan Miniter. New York: Crown Business. 2012.
*Lucas, Robert E. Jr. and Benjamin Moll, 2014, "Knowledge Growth and the Allocation of Time", Journal of Political Economy, University of Chicago Press, vol. 122(1), pages 1 - 51.
See also
*
Welfare cost of business cycles
*
List of economists
This is an incomplete alphabetical list by surname of notable economists, experts in the social science of economics, past and present. For a history of economics, see the article History of economic thought. Only economists with biographical artic ...
*
Lucas islands model
*
Uzawa–Lucas model
Notes
References
*
*
External links
Robert E. Lucas Jr.'s website at University of Chicago* includes the Prize Lecture on December 7, 1995 ''Monetary Neutrality''
Interview onChannel 4
Channel 4 is a British free-to-air public broadcast television network operated by the state-owned enterprise, state-owned Channel Four Television Corporation. It began its transmission on 2 November 1982 and was established to provide a four ...
Chicago Economics on Trial *
{{DEFAULTSORT:Lucas, Robert E. Jr.
1937 births
Living people
Carnegie Mellon University faculty
Members of the United States National Academy of Sciences
Macroeconomists
New classical economists
20th-century American economists
21st-century American economists
Nobel laureates in Economics
American Nobel laureates
University of Chicago alumni
University of Chicago faculty
People from Yakima, Washington
Fellows of the Econometric Society
Presidents of the Econometric Society
Presidents of the American Economic Association
Earhart Foundation Fellows
Growth economists
Fellows of the American Academy of Arts and Sciences
Distinguished Fellows of the American Economic Association
National Bureau of Economic Research
Economists from Washington (state)
Nancy L. Schwartz Memorial Lecture speakers
Members of the American Philosophical Society
Chicago School economists
Journal of Political Economy editors