By Robert E. Lucas Jr., Max Gillman
Robert Lucas is without doubt one of the striking financial theorists of the prior hundred years. besides Knut Wicksell, Irving Fisher, John Maynard Keynes, James Tobin, and Milton Friedman (his teacher), Lucas revolutionized our knowing of ways cash interacts with the genuine economic system of construction, intake, and exchange.
Lucas’s contributions are either methodological and major. Methodologically, he constructed dynamic, stochastic, common equilibrium versions to investigate monetary decision-makers working via time in a fancy, probabilistic atmosphere. Substantively, he included the volume thought of cash into those versions and derived its implications for cash progress, inflation, and rates of interest ultimately. He additionally confirmed different results of expected and unanticipated adjustments within the inventory of cash on monetary fluctuations, and helped to illustrate that there has been now not a long-run trade-off among unemployment and inflation (the Phillips curve) that policy-makers may perhaps exploit.
The twenty-one papers accrued during this quantity fall essentially into 3 different types: middle financial concept and public finance, asset pricing, and the true results of financial instability. released among 1972 and 2007, they are going to motivate scholars and researchers who are looking to examine the paintings of a grasp of financial modeling and to improve economics as a natural and utilized science.