Robert Lucas Jr.

About Robert Lucas Jr.

Who is it?: Economist
Birth Day: September 15, 1937
Birth Place: Yakima, Washington, USA, United States
Birth Sign: Libra
Institution: Carnegie Mellon University University of Chicago
Field: Macroeconomics
School or tradition: New classical macroeconomics
Alma mater: University of Chicago (BA, MA, PhD) University of California, Berkeley
Doctoral advisor: Arnold Harberger H. Gregg Lewis
Doctoral students: Marcel Boyer Costas Azariadis Jean-Pierre Danthine Boyan Jovanovic Paul Romer
Influences: Milton Friedman John Muth Paul Anthony Samuelson
Contributions: Rational expectations Lucas critique Behavioral Economics
Awards: Nobel Memorial Prize in Economic Sciences (1995)

Robert Lucas Jr. Net Worth

Robert Lucas Jr. was bornon September 15, 1937 in Yakima, Washington, USA, United States, is Economist. Robert Lucas Jr. is an American economist who received the Nobel Prize for developing the ‘Theory of Rational Expectations’. With this theory he explained how individual people take their own economic decisions based upon their past experiences disregarding the results forecast by national agencies depending on their monetary and fiscal policies. He even questioned the macroeconomic policies of distinguished economists like John Maynard Keynes and the intervention of governments in domestic affairs trying to produce the desired results. According to the ‘Philips curve’ a government could lower unemployment rates by increasing the level of inflation. It caused wages to rise sending out a signal to the unemployed that they would get generous wages if they get employed somehow. This causes the unemployment rate to go down which was challenged by Lucas as self defeating as the unemployed could not be fooled repeatedly. He also declared that inflation would ultimately lead to more and more unemployment leading to rise in the rate of unemployed people in the country. He argued that instead of improving the situation, fiscal policies that try to manipulate the economy by creating false expectations may introduce more problems. He revolutionized the macroeconomic theory with his research work from 1970 to 2000 which helped other economists like Edward Prescott and Finn Kydland to win the Nobel in 2004.
Robert Lucas Jr. is a member of Intellectuals & Academics

💰 Net worth: Under Review

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Biography/Timeline

1937

Lucas was born in 1937 in Yakima, Washington, and was the eldest child of Robert Emerson Lucas and Jane Templeton Lucas.

1959

Lucas received his B.A. in History in 1959 from the University of Chicago. While he was attending University of California, Berkeley as a graduate student in 1959, Lucas left Berkeley due to financial reasons and returned to Chicago in 1960, earning a Ph.D. in Economics in 1964. His dissertation “Substitution between Labor and Capital in U.S. Manufacturing: 1929–1958” was written under the supervision of Arnold Harberger and H. Gregg Lewis. Lucas studied economics for his Ph.D. 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.

1972

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.

1975

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.

1976

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.

2003

In 2003, he stated, about 5 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.”

2013

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.