Birthday: September 15, 1937
Age: 83 Years, 83 Year Old Males
Sun Sign: Virgo
Also Known As: Robert Emerson Lucas Jr.
Born in: Yakima, Washington, USA
Famous as: Economist
Spouse/Ex-: Nancy Stokey, Rita Cohen
father: Robert Emerson Lucas
mother: Jane Templeton
siblings: Daniel, Jenepher, Peter
children: Joseph, Stephen
U.S. State: Washington
awards: Nobel Memorial Prize in Economic Sciences (1995)
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.
Childhood & Early Life
Robert Lucas Jr. was born Robert Emerson Lucas Jr. in Yakima, Washington, US on September 15, 1937.
He is the oldest child of Robert Emerson Lucas and Jane Templeton. He has a younger sister named Jenepher and two younger brothers named Peter and Daniel.
His parents had a small restaurant named ‘The Lucas Ice Creamery’ in Yakima which had to be shutdown due to the economic recession during 1937 and 1938.
During the Second World War his parents moved to Seattle where he father found work as a welder in a commercial refrigeration company and his mother went back to being a fashion artist.
He joined the ‘Seattle Public Schools’ and graduated from the ‘Roosevelt High School’ in 1955.
He was good in mathematics and science subjects and was expected to become an engineer after joining the ‘University of Washington’ at Seattle.
At the age of seventeen his aspirations of becoming an engineer ended when MIT refused to award him a scholarship. The ‘University of Chicago’ offered him one but it did not have any engineering school.
He attended the ‘University of Chicago’ and took mathematics as a major subject. Soon he lost interest in mathematics as most of the things in the course were those that he had already learnt during high school. He was not prepared to take up Physics as a major subject as was the custom for good students in ‘Chicago University’ in those days. Instead he majored in Ancient History and obtained his bachelor’s degree in 1959.
He obtained a ‘Woodraw Wilson Doctoral Fellowship’ and joined the graduate program in History at the ‘University of California’ at Berkeley. He changed over to Economic History after becoming interested in the economic life which went on even after political disruptions. He wanted to study more of economics but was unable to get any financial support from the ‘Economics Department’ in Berkeley.
He returned to Chicago and enrolled in some undergraduate and graduate courses to prepare himself for the graduate course in Economics beginning next fall.
He did his doctorate on economics and obtained his PhD degree from the ‘University of Chicago’ in 1964.
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Robert Lucas Jr. taught at the ‘Graduate School of Industrial Administration, now called the ‘Tepper School of Business’ at the Carnegie Mellon University from 1963 to 1975.
In 1972 he developed a model which had the expectations of future prices and quantities incorporated into it. He also provided an explanation for the relationship between output and inflation which had been depicted by the ‘Philips curve’ earlier.
He returned to the ‘University of Chicago’ in 1975 as a professor of economics.
In 1976 he developed the ‘Lucas critique’ which should be applied to economic policy making. The critique challenged the foundations of macroeconomic theory and explained the relationship between inflation and unemployment.
In 1980 he was made a ‘John Dewey Distinguished Service Professor Emeritus in Economics’.
He developed a ‘theory of supply’ which suggests that people can be tricked by unsystematic monetary policy. He also developed the ‘Uzawa-Lucas Model’ in collaboration with Hirofumi Uzawa on the accumulation of capital by humans and the ‘Lucas Paradox’ which explains the reasons behind the small flow of capital from developed countries to developing countries.
During the late 1980s and 1990s along with Paul Romer he forecasted the birth of ‘endogenous growth theory’ and increased research on economic growth.
He also contributed to behavioral economics which helped to understand the deviations occurring to the ‘law of one price’ due to the irrationality of investors.
He served as the President of the ‘Econometric Society’ in 1997 and as the President of the ‘American Economic Association’ in 2002.
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In 2003 he proclaimed that the problem of depression prevention has been solved for decades.
Robert Lucas Jr. published a collection of his research work titled ‘Studies in Business-Cycle Theory’ in 1981.
In 1987 he published an overview of the ‘economic theory’ in his book named ‘Models of Business’.
He also edited and co-edited several journals on economics and published his collection of writings the book ‘Lectures on Economic Growth’ in 2001.
Awards & Achievements
Robert Lucas Jr. was made a ‘Fellow of the Econometric Society’ in 1975.
He became a member of the ‘American Academy of Arts and Sciences’ in 1980.
In 1981 Lucas was appointed as a member of the ‘National Academy of Sciences’.
He was awarded the Nobel Prize in Economics in 1995.
Personal Life & Legacy
Robert Lucas Jr. married Rita Cohen, an undergraduate student at Chicago, in August 1959, and separated from her in 1982. He divorced her in 1988. He has two sons from the marriage named Stephen and Joseph.
In 1982 he married Nancy Stokey and collaborated with her in writing various papers on public finance, growth and monetary theories.
Robert Lucas Jr. is regarded as the greatest macroeconomist of the century.