Robert Lucas, Jr. quotes

Robert Lucas, Jr. was an American economist renowned for his work on rational expectations and macroeconomic theory. His research fundamentally changed modern economics, particularly in how policymakers understand inflation and economic cycles. He was awarded the Nobel Memorial Prize in Economic Sciences in 1995 for these contributions. Here are 10 of his quotes:

The main development I want to discuss has already occurred: Keynesian economics is dead [maybe ‘disappeared' is a better term]. I don't know exactly when this happened but it is true today and it wasn't true two years ago. This is a sociological not an economic observation, so the evidence for it is sociological. For example, you cannot find a good, under 40 economist who identifies himself and his work as ‘Keynesian'. Indeed, people even take offense if referred to in this way. At research seminars, people don't take Keynesian theorizing seriously any more-the audience starts to whisper and giggle to one another. Leading journals aren't getting Keynesian papers submitted any more.

Robert Lucas, Jr.

So I am skeptical about the argument that the subprime mortgage problem will contaminate the whole mortgage market, that housing construction will come to a halt, and that the economy will slip into a recession. Every step in this chain is questionable and none has been quantified. If we have learned anything from the past 20 years it is that there is a lot of stability built into the real economy.

Robert Lucas, Jr.

I guess everyone is a Keynesian in a foxhole.

Robert Lucas, Jr.

For policy, the central fact is that Keynesian policy recommendations have no sounder basis, in a scientific sense, than recommendations of non-Keynesian economists or, for that matter, non-economists.

Robert Lucas, Jr.

The Keynesian Revolution was, in the form in which it succeeded in the United States, a revolution in method. This was not Keynes's intent, nor is it the view of all of his most eminent followers. Yet if one does not view the revolution in this way, it is impossible to account for some of its most important features.

Robert Lucas, Jr.

A key element in all Keynesian models is a ‘trade-off between inflation and real output: the higher is the inflation rate; the higher is output (or equivalently, the lower is the rate of unemployment).

Robert Lucas, Jr.

The consequences for human welfare involved in questions about human capital spillovers are simply staggering. Once one starts to think about them, it's hard to think of anything else.

Robert Lucas, Jr.

Most trails can be fairly simple.

Robert Lucas, Jr.

The Keynesian Revolution was, in the form in which it succeeded in the United States, a revolution in method.

Robert Lucas, Jr.