Robert Emerson Lucas Jr., one of the most influential economists of recent decades, has died this Monday at the age of 85, as reported by colleagues and students on social networks and confirmed by the University of Chicago, where he was a professor. Lucas won the Nobel Prize in Economics in 1995 for his rational expectations thesis, and many of his students argued that he actually would have deserved two.
“It is impossible to overstate Bob’s influence on macroeconomics,” said Robert Shimer, chair of the Kenneth C. Griffin Department of Economics at the University of Chicago, through a statement. “Bob leaves behind a legacy of groundbreaking research, teaching, and leadership that transformed the field of economics,” he added.
He received the Nobel Prize “for having developed and applied the rational expectations hypothesis, thereby transforming macroeconomic analysis and deepening our understanding of economic policy.” according to the justification given by the Academy.
He argued that policy makers cannot assume that their actions will produce the expected results, but must consider how they will affect people’s expectations. Lucas’s work suggested, for example, that certain policies aimed at reducing unemployment could backfire by raising inflation expectations. His thesis was an amendment, at least partial, to Keynesianism and its defense of public intervention in the economy. In a way, he revolutionized the methodology of macroeconomics and forced attention to variables that had been relegated to microeconomics.
Rest in peace Robert Lucas. A wonderful teacher, the deepest of thinkers, and an incredibly clear and insightful writer. He was always obsessed with ideas, always digging deep.” The Spanish economist Luis Garicano, who was his student, has written on Twitter.
Lucas was born in Yakima, Washington State, in 1937. His parents had moved to Yakima from Seattle to open a small restaurant, The Lucas Ice Creamery. The restaurant fell victim to the 1937-38 recession, and during World War II the family moved to Seattle, where his father found work as a steamfitter in the shipyards and her mother resumed her earlier career. as a fashion artist.
After the war, his father found a job as a welder with a commercial refrigeration company, Lewis Refrigeration. He became a craftsman, then a sales engineer, then a director of sales, and finally the president of the company. He had no college degree or engineering background, and he learned the engineering he needed from the people he worked with and from manuals.
After graduating from high school, he attended the University of Chicago, where he majored first in history. Reading the Belgian historian Henri Pirenne, whose account of the end of the Roman period emphasized the continuity of economic life in the face of great political disturbances, he became interested in economics. In 1964 he received a doctorate in that specialty, a disciple of Paul Samuelson and Milton Friedman. Since then, he has worked, taught, and continued research, first at Carnegie Mellon University and later at the University of Chicago. He had two children with his first wife, Rita Lucas, from whom he separated in 1982 and divorced years later. Since 1982 he lived with Nancy Stokes.
crisis prevention
Lucas defined the profession as follows: “Economists have an image of practicality and worldliness that physicists and poets do not share. Some economists have earned this image. Others—myself and many of my colleagues here in Chicago—don’t. I don’t know if you’ll take this as a confession or a boast, but basically we’re storytellers, creators of imaginary economic systems,” he told University of Chicago students. in the 1988 commencement speech.
He then told the graduates how to cause an economic depression at an imaginary amusement park by manipulating the amount of money or the price of tickets. And how could it be corrected in that way? policy monetary, if he acted by surprise, that self-induced depression. His faith in the power of those tools led him in 2003 to assert that macroeconomists had resolved for practical purposes “the central problem of depression prevention” and should be devoted to other topics.
When five years later, with the collapse of Lehman Brothers, the Great Recession hit, many sought in those words a contribution to complacency in which economists and authorities had settled, somewhat unaware of vulnerability to serious crises.
Despite the criticism, Lucas never admitted that he was wrong with that proclamation. He justified it by saying that until the collapse of Lehman Brothers, the risk of a financial crisis was so small that to have recommended “preventive monetary policies of the magnitude that followed would have been like running off the road at the possibility that someone suddenly swerve head-on into your lane.” As he wrote in an article in The Economist.
In the end, fiscal policy, with multimillion-dollar rescue and stimulus plans, and monetary policy, then in the hands of Ben Bernanke, an expert on the Great Depression, together ended up avoiding much more serious consequences for the US economy and left open the battle between Keynesians and monetarists.
In addition to his seminal contribution to rational expectations, his later work on the forces driving economic development helped spark a flood of research into the so-called new growth theory, for which his disciples believe he would again have deserved the Nobel Prize. “When Bob turned his attention to long-term growth, he developed a fundamental theory of income differences between countries sustained by learning from others, a theme that continued in much of his subsequent research,” said Shimer, who has also highlighted his contributions on the real effects of monetary policy, his works on urban economy, international trade or dynamic economic problems, among others.
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