This week we lost another of the 20th Century's greatest economists, Robert Lucas. Lucas won the Nobel Prize 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". If anything, that radically understates the contribution of Lucas to the study of macroeconomics, and to economics more generally.
Lucas will become familiar to my ECONS101 students in the next couple of weeks, or rather his critique of the Phillips Curve will become familiar to them. Now, we might quibble about the 'rational' part of rational expectations theory, but regardless the addition of explicit consideration of expectations led to a revolution in macroeconomic modelling. The importance of that contribution, along with the many other changes that Lucas brought about in the way that economists think about an model the macroeconomy, are explored in this blog article by John Cochrane (see Cochrane's more personal reflections here as well).
Cochrane labels Lucas "the most important macroeconomist of the 20th century". He is not alone in this high praise. The Economist described Lucas in an article yesterday as "a giant of macroeconomics", while David Henderson in the Wall Street Journal called him "a giant in the field". A number of tributes will no doubt be written over the coming days and weeks. The New York Times has a nice obituary, and Tyler Cowen shared his thoughts in this Bloomberg article (paywalled). Lucas had a huge impact on economics and economists. He will be missed.
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