Robert Lucas
Keynesianism had taken some lumps by the early Nineteen Seventies, however it was nonetheless the dominant faculty in macroeconomics. Then Robert E. Lucas Jr. got here alongside. The longtime College of Chicago economist died Monday at 85.
In a well-known 1972 article, Lucas made an important remark. He famous that just about each macroeconomic mannequin erroneously assumed, implicitly or explicitly, that authorities officers who made financial coverage may primarily idiot folks into making irrational selections. Microeconomics assumed folks have been rational. Why shouldn’t macroeconomics make the identical assumption? For this and different insights he was awarded the 1995 Nobel Prize in Economics.
That is from David R. Henderson, “Robert E. Lucas Introduced Rationality to Macroeconomics,” Wall Road Journal, Might 15, 2023. (Might 16 print version.)
I discovered yesterday morning from John Cochrane that Bob Lucas died yesterday. I approached my editor on the WSJ and he gave me the inexperienced gentle. That is the quickest article I’ve ever written: just below one hour.
I preferred the best way the editor modified my opening paragraph and my closing paragraph. I nonetheless like my title although: “The Accomplishments of a Towering But Humble Economist.”
My favourite components are close to the top about his perception that growth economics is development economics and his well-known quote, which I can quote as a result of it’s on the market within the literature:
Is there some motion a authorities of India may take that will lead the Indian financial system to develop like Indonesia’s or Egypt’s? In that case, what,precisely? If not, what’s it in regards to the “nature of India” that makes it so? The results for human welfare concerned in questions like these are merely staggering: As soon as one begins to consider them, it’s onerous to consider the rest.
I’ll put up the entire thing when 30 days are up.
