Robert E. Lucas Jr.
Robert Emerson Lucas Jr. is a New Classical economist at the University of Chicago, prestigious for his noticeable job in creating microeconomic establishments for macroeconomics in view of rational expectations.
Dr. Lucas won the Nobel Prize in Economics in 1995 for his contributions to the theory of rational expectations.
Early Life and Education
Robert E. Lucas Jr. was conceived the oldest child of Robert Emerson Lucas Sr. furthermore, Jane Templeton Lucas in Yakima, Washington, on Sept. 15, 1937. Lucas received a Bachelor of Arts in History from the University of Chicago in 1959. He initially sought after graduate studies at the University of California, Berkeley, before returning to Chicago for financial reasons. In 1964, he earned his Ph.D. in economics.
Initially, he accepted his scholarly life would center around history, and just proceeded with his economic studies in the wake of arriving at the resolution that economics is the true main impetus of history. Fundamentally, Lucas professed to have concentrated on economics through a "Marxist" point of view, as in Marx accepted the tremendous, unoriginal forces that drive history are generally an issue of economics.
Lucas turned into a teacher at Carnegie Mellon University at the Graduate School of Industrial Administration, before returning to the University of Chicago in 1975. He is at present a teacher emeritus at the University of Chicago.
Remarkable Accomplishments
Champ of the Nobel Memorial Prize in Economics, Dr. Lucas is generally notable for his contributions to macroeconomics including the development of the New Classical school of macroeconomics and the Lucas Critique.
Lucas has spent quite a bit of his scholastic career exploring the ramifications of the rational expectations theory in macroeconomics. He likewise made important contributions to speculations of economic growth.
Awards and Honors
In 1995, Lucas was granted the Nobel Memorial Prize in Economics for fostering the theory of rational expectations.
Theory of Rational Expectations
Lucas assembled his career applying the possibility that individuals in the economy form rational expectations about future occasions and the impact of macroeconomic policies. In a paper in 1972, he incorporated the possibility of rational expectations to broaden the Friedman- Phelps theory of long-term vertical Phillips Curve. A vertical Phillips Curve suggests that expansionary monetary policy will increase inflation, without helping the economy.
That's what lucas contended on the off chance that (as is assumed in microeconomics) individuals in the economy are rational, just unexpected changes to the money supply will affect output and work; if not individuals will just rationally set their wage and price requests as per their expectations of future inflation when a monetary policy is announced and the policy will just affect prices and inflation rates.
Consequently not just (per Friedman and Phelps) is the Phillips Curve vertical over the long haul, it is additionally vertical in the short run with the exception of when monetary policymakers can make unannounced, eccentric, or really astonishing moves that market participants can't expect.
The Lucas Critique
Dr. Lucas additionally developed the Lucas Critique of economic policymaking, which holds that relationships between economic factors saw in past data or estimated by large scale econometric models are not dependable for economic policymaking on the grounds that individuals rationally adjust their expectations and behavior in view of how they might interpret the impact of economic policy.
The expectations about economic conditions and policy that formed consumer, business, and investor behavior during the periods from which past data are drawn frequently won't hold once conditions and policies change.
This means that economic policymakers couldn't realistically expect to deal with the economy by fiddling with key factors, for example, money supply or interest rates, in light of the fact that the act of doing so likewise changes the relationship between these factors and the factors that address the targeted results, for example, GDP or unemployment rates. In this manner the Lucas Critique contends against an activist macroeconomic policy pointed toward dealing with the economy.
Different Contributions
Lucas likewise made contributions to endogenous growth theory and to bringing together growth theory (which applied generally to growth in developed economies) with development economics (applied to less developed economies).
His contributions incorporate the Lucas-Uzawa model, which makes sense of long-run economic growth as dependent on human capital accumulation, and the Lucas Paradox, which inquires as to why capital doesn't seem to flow to locales of the globe where capital is moderately scant (and subsequently gets a higher rate of return) as neoclassical growth theory would foresee.
Features
- He is likewise known for the Lucas-Uzawa model, which makes sense of long-run economic growth as dependent on human capital accumulation, and the Lucas Paradox, which inquires as to why capital doesn't seem to flow to locales where capital is somewhat scant as neoclassical growth theory would anticipate.
- Lucas received the Nobel Prize in 1995 for his contributions to economic theory.
- His contributions to endogenous growth theory and to bringing together growth theory were likewise outstanding.
- Dr. Lucas is best known for his development of rational expectations theory and the eponymous Lucas Critique of macroeconomic policy.
- Dr. Robert E. Lucas Jr. is a New Classical economist and long-time teacher at the University of Chicago.
