Robert E. Lucas

Bio: Robert E. Lucas is an academic researcher from University of Chicago. The author has contributed to research in topics: Population & General equilibrium theory. The author has an hindex of 81, co-authored 204 publications receiving 94081 citations. Previous affiliations of Robert E. Lucas include National Bureau of Economic Research & Boston University.

On the internal structure of cities

Abstract: We prove the existence of a symmetric equilibrium in a circular city in which businesses and housing can both be located anywhere in the city. In this equilibrium, firms balance the external benefits from locating near other producers against the costs of longer commutes for workers. An equilibrium city need not take the form of a central business district surrounded by a residential area. We propose a general algorithm for constructing equilibria, and use it to study the way land use is affected by changes in the model's underlying parameters.

Money and Interest in a Cash-in-Advance Economy

Abstract: The authors analyze an aggregative general equilibrium model, in which the use of money is motivated by a cash-in-advance constraint, applied to purchases of a subset of consumption goods. The system is subject to both real and monetary shocks, which are economy-wide and observed by all. They develop methods for verifying the existence of, characterizing, and explicitly calculating equilibria. Copyright 1987 by The Econometric Society.

Studies in business-cycle theory

Abstract: An article in Fortune a few years ago identified Robert Lucas as "the intellectual leader of the rational-expectations school." An academic colleague has called Lucas "the dominant figure in American macroeconomics." And another refers to this group of 14 essays, nearly all of which were first published during the 1970s, as the most influential contribution to macroeconomics in that decade.This volume includes: Real Wages, Employment, and Inflation (with Leonard A. Rapping); Unemployment in the Great Depression: Is there a Full Explanation? (with Leonard Rapping); Expectations and the Neutrality of Money; Econometric Testing of the Natural Rate Hypothesis; Econometric Policy Evaluation: A Critique; Some International Evidence on Output-Inflation Tradeoffs; Capacity, Overtime, and Empirical Production Function; Equilibrium Search and Unemployment (with Edward C. Prescott); An Equilibrium Model of the Business Cycle; Understanding Business Cycles; Unemployment Policy, Rules, Discretion, and the Role of the Economic Advisor a review of Towards Full Employment and Price Stability, A Report to the OECD by a Group of Independent Experts, by Paul McCracken et al.; and Methods and Problems in Business-Cycle Theory.

On the Mechanics of Economic Development

Abstract: This paper considers the prospects for constructing a neoclassical theory of growth and international trade that is consistent with some of the main features of economic development. Three models are considered and compared to evidence: a model emphasizing physical capital accumulation and technological change, a model emphasizing human capital accumulation through schooling, and a model emphasizing specialized human capital accumulation through learning-by-doing.

Social Capital in the Creation of Human Capital

Abstract: In this paper, the concept of social capital is introduced and illustrated, its forms are described, the social structural conditions under which it arises are examined, and it is used in an analys...

A Contribution to the Empirics of Economic Growth

Abstract: This paper examines whether the Solow growth model is consistent with the international variation in the standard of living. It shows that an augmented Solow model that includes accumulation of human as well as physical capital provides an excellent description of the cross-country data. The paper also examines the implications of the Solow model for convergence in standards of living, that is, for whether poor countries tend to grow faster than rich countries. The evidence indicates that, holding population growth and capital accumulation constant, countries converge at about the rate the augmented Solow model predicts. This paper takes Robert Solow seriously. In his classic 1956 article Solow proposed that we begin the study of economic growth by assuming a standard neoclassical production function with decreasing returns to capital. Taking the rates of saving and population growth as exogenous, he showed that these two vari- ables determine the steady-state level of income per capita. Be- cause saving and population growth rates vary across countries, different countries reach different steady states. Solow's model gives simple testable predictions about how these variables influ- ence the steady-state level of income. The higher the rate of saving, the richer the country. The higher the rate of population growth, the poorer the country. This paper argues that the predictions of the Solow model are, to a first approximation, consistent with the evidence. Examining recently available data for a large set of countries, we find that saving and population growth affect income in the directions that Solow predicted. Moreover, more than half of the cross-country variation in income per capita can be explained by these two variables alone. Yet all is not right for the Solow model. Although the model correctly predicts the directions of the effects of saving and

Endogenous Technological Change

Abstract: Growth in this model is driven by technological change that arises from intentional investment decisions made by profit-maximizing agents. The distinguishing feature of the technology as an input is that it is neither a conventional good nor a public good; it is a nonrival, partially excludable good. Because of the nonconvexity introduced by a nonrival good, price-taking competition cannot be supported. Instead, the equilibrium is one with monopolistic competition. The main conclusions are that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.

Endogenous Technological Change

Abstract: Growth in this model is driven by technological change that arises from intentional investment decisions made by profit maximizing agents. The distinguishing feature of the technology as an input is that it is neither a conventional good nor a public good; it is a nonrival, partially excludable good. Because of the nonconvexity introduced by a nonrival good, price-taking competition cannot be supported, and instead, the equilibriumis one with monopolistic competition. The main conclusions are that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.