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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.


Papers
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Journal ArticleDOI
TL;DR: This article developed a model of a monetary economy in which individual firms are subject to idiosyncratic productivity shocks as well as general inflation, and calibrated this cost and the variance and autocorrelation of the idiosyncratic shock using a new U.S. data set of individual prices due to Klenow and Kryvtsov.
Abstract: This paper develops a model of a monetary economy in which individual firms are subject to idiosyncratic productivity shocks as well as general inflation. Sellers can change price only by incurring a real “menu cost.” We calibrate this cost and the variance and autocorrelation of the idiosyncratic shock using a new U.S. data set of individual prices due to Klenow and Kryvtsov. The prediction of the calibrated model for the effects of high inflation on the frequency of price changes accords well with international evidence from various studies. The model is also used to conduct numerical experiments on the economy’s response to various shocks. In none of the simulations we conducted did monetary shocks induce large or persistent real responses.

528 citations

Book
01 Jan 2002
TL;DR: In this article, the authors discuss the mechanics of economic development and why capital flow from rich countries to poor countries does not flow from Rich to Poor Countries, and make a Miracle.
Abstract: Acknowledgments Introduction 1. On the Mechanics of Economic Development 2. Why Doesn't Capital Flow from Rich to Poor Countries? 3. Making a Miracle 4. Some Macroeconomics for the Twenty-First Century 5. The Industrial Revolution: Past and Future References Index

523 citations

Posted Content
TL;DR: In this article, the authors compared moving averages of the three variables in question, using quarterly U.S. time-series for the period 1953-77, and found that a given change in the rate of change of the quantity of money induces an equal change in price inflation and an equal increase in nominal rates of interest.
Abstract: of two central implications of the quantity theory of money: that a given change in the rate of change in the quantity of money induces (i) an equal change in the rate of price inflation; and (ii) an equal change in nominal rates of interest. The illustrations were obtained by comparing moving averages of the three variables in question, using quarterly U.S. time-series for the period 1953-77. Readers may find the results of interest as additional confirmation of the quantity theory, as an example of one way in which the quantity-theoretic relationships can be uncovered via atheoretical methods from time-series which are subject to a variety of other forces, or as a measure of the extent to which the inflation and interest rate experience of the postwar period can be understood in terms of purely classical, monetary forces. The theoretical background of the study is reviewed, very briefly as it is familiar material, in the next section. The data processing methods are described and rationalized in Section II. The illustrations

519 citations

Journal ArticleDOI
TL;DR: The problem of bringing available evidence to bear on the assessment of different monetary policies was not solved in the 1970s when I began my work on it, and even now this question has not been given anything like a fully satisfactory answer.
Abstract: The work for which I have received the Nobel Prize was part of an effort to understand how changes in the conduct of monetary policy can influence inflation, employment, and production. So much thought has been devoted to this question and so much evidence is available that one might reasonably assume that it had been solved long ago. But this is not the case: It had not been solved in the 1970s when I began my work on it, and even now this question has not been given anything like a fully satisfactory answer. In this lecture I shall try to clarify what it is about the problem of bringing available evidence to bear on the assessment of different monetary policies that makes it so difficult and to review the progress that has been made toward solving it in the last two decades. From the beginnings of modern monetary theory, in David Hume's marvelous essays of 1752, Of Money and Of Interest, conclusions about the effect of changes in money have seemed to depend critically on the way in which the change is effected. In formulating the doctrine that we now call the quantity theory of money, Hume stressed the units-change aspect of changes in the money stock and the irrelevance of such changes to the behavior of rational people.

482 citations


Cited by
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TL;DR: 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...
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...

31,693 citations

Journal ArticleDOI
TL;DR: The authors examined whether the Solow growth model is consistent with the international variation in the standard of living, and they showed that an augmented Solow model that includes accumulation of human as well as physical capital provides an excellent description of the cross-country data.
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

14,402 citations

ReportDOI
TL;DR: In this paper, the authors show 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.
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.

12,469 citations

Posted Content
TL;DR: In this paper, the authors show 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.
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.

11,095 citations