Robert Lucas, Jr.
The central predictions of the quantity theory are that, in the long run, money growth should be neutral in its effects on the growth rate of production and should affect the inflation rate on a one-for-one basis.
I was born in 1937, in Yakima, Washington, the oldest child of Robert Emerson Lucas and Jane Templeton Lucas. My sister Jenepher was born in 1939 and my brother Peter in 1940. My parents had moved to Yakima from Seattle to open a small restaurant, The Lucas Ice Creamery.
My parents were admirers of President Roosevelt and the New Deal. Their parents and most of our relatives and neighbors were Republicans, so they were self-conscious in their liberalism and took it as emblematic of their ability to think for themselves.
I was good at math and science, and it was expected that I would attend the University of Washington in Seattle and become an engineer. But by the time I was seventeen, I was ready to leave home, a decision my parents agreed to support if I could obtain a scholarship. MIT did not grant me one, but the University of Chicago did.
I obtained a Woodrow Wilson Doctoral Fellowship and entered the graduate program in History at the University of California. With no Greek or French and minimal Latin and German, I was in no position to pursue my classical interests, so I began work at Berkeley with little more than an open mind.
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.
Monetary contractions are attractive as the key shocks in the 1929-1933 years, and in other severe depressions, because there do not seem to be any other candidates.
The observation that money changes induce output changes in the same direction receives confirmation in some data sets but is hard to see in others. Large-scale reductions in money growth can be associated with large-scale depressions or, if carried out in the form of a credible reform, with no depression at all.
The consequences for human welfare involved in questions like these are simply staggering: once one starts to think about them, it is hard to think about anything else.Collection: Thinking
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 elseCollection: Thinking
Solitude is an essential quality of wilderness.Collection: Solitude
The potential gains from improved stabilization policies are on the order of hundredths of a percent of consumption, perhaps two orders of magnitude smaller than the potential benefits of available supply-side fiscal reforms.Collection: Order
Most trails can be fairly simple.Collection: Simple