Intermediate Macroeconomic Theory : Robert E. Lucas Essay

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Latiefah Stewart
Professor Kahhat
Intermediate Macroeconomic Theory

Robert E. Lucas

Robert E. Lucas was in Yakima, Washington, in 1937. He attended Seattle Public Schools, and graduated from Roosevelt High School in 1955. He was great at math and science. Growing up it was almost expected of Lucas to attend the University of Washington in Seattle, and become an engineer. This however wasn’t what happened. MIT didn’t grant him the scholarship he needed in order to attend college there, however, University of Chicago did. He studied Mathematics. Over time, it got hard and he lost interest. Instead, he found a new interest in liberal arts; which was the core of the University of Chicago. In 1963 Richard Cyert, the Dean of the Graduate School of Industrial Administration at Carnegie Institute of Technology offered Lucas a faculty position, where he taught until 1974, which is when he returned to Chicago as a faculty member. Between this time, Lucas published his paper, “Expectations and the Neutrality of Money”.
In 1995, Lucas was awarded the Noble Prize in economics, for having developed and applied the hypothesis of Rational Expectation. This, transformed macroeconomics analysis and deepened everyone’s understanding of economic policy. More than any other person in the period from 1970 to 2000, Lucas revolutionized macroeconomic theory. Most of his work led to the work of Finn Kydland and Edward Prescott, which also won them the noble prize
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