[The Quantitative Significance of the Lucas Critique]: Comment

1991 ◽  
Vol 9 (4) ◽  
pp. 388 ◽  
Author(s):  
James D. Hamilton
Keyword(s):  
Lucas Critique

scholarly journals On the empirical relevance of the Lucas critique: the case of euro area money demand

Empirica ◽  
2015 ◽  
Vol 43 (1) ◽  
pp. 61-82 ◽  
Author(s):  
Christian Dreger ◽  
Jürgen Wolters
Keyword(s):  
Euro Area ◽  
Money Demand ◽  
Lucas Critique

The Quantitative Significance of the Lucas Critique

1991 ◽  
Vol 9 (4) ◽  
pp. 361-387 ◽  
Author(s):  
Preston J. Miller ◽  
William T. Roberds
Keyword(s):  
Lucas Critique

The Rational Expectations Hypothesis and the New Classicals

2020 ◽  
pp. 57-100
Author(s):  
Christopher Tsoukis
Keyword(s):  
Market Efficiency ◽  
Bounded Rationality ◽  
Rational Expectations ◽  
Island Model ◽  
Supply Function ◽  
Stabilization Policy ◽  
Wage Setting ◽  
Expectations Hypothesis ◽  
Lucas Critique ◽  
Forward Looking

This chapter analyses the Rational Expectations Hypothesis (REH), a pillar of forward-looking macroeconomics that emphasizes expectations. It also develops its implications in terms of ‘market efficiency’ and related concepts. It then reviews New Classical Macroeconomics: its main tenets, the ‘Lucas supply function’ that is crucial for much subsequent theory, and the ‘Lucas island model’ that underpins it. The centrepiece ‘Policy Ineffectiveness Proposition’ (PIP) is developed both intuitively and more formally. Subsequently, the chapter reviews one major line of criticism of PIP, the fact that markets may not clear, based in particular on staggered wage setting. Broader criticisms of the REH, including ‘bounded rationality’, are also reviewed. The chapter concludes with yet another landmark contribution of Robert Lucas, namely the ‘Lucas critique’ of activist stabilization policy.

A Reply to George Lucas’ Critique of Reason and Justice

1990 ◽  
Vol 22 (1) ◽  
pp. 91-93
Author(s):  
Richard Dien Winfield ◽  
Keyword(s):  
Lucas Critique ◽  
George Lucas

L’economia dell’equilibrio

1985 ◽  
Vol 3 (2) ◽  
pp. 97-108
Author(s):  
Andrea Beltratti
Keyword(s):  
Characteristic Feature ◽  
Business Cycles ◽  
Rational Expectations ◽  
Substantial Improvement ◽  
Economic Systems ◽  
Policy Effectiveness ◽  
Market Clearing ◽  
Expectations Hypothesis ◽  
Lucas Critique ◽  
Keynesian Economics

Abstract The new classical macroeconomists have widely criticized Keynesian economics during the last fifteen years; most of all, on the basis of a lack of microfoundations to Keynesian models and theories.The rational expectations hypothesis is necessary but not sufficient, by itself, to deny the policy effectiveness results advocated by Keynesian theorists; the most important hypothesis, and the most characteristic feature, of the new classical school is continuous market-clearing on each market. Rational expectations can be used also in disequilibrium models, and can even strengthen policy effectiveness results.This paper considers some interesting points made by the equilibrium theorists, such as the Lucas critique and the equilibrium business cycles, and also tries to show some limits of the models.The debate between Keynesians and New Classical Economists is very useful; both schools are able to benefit from the valuable insights of the last few years, which allow theorists to hope in a substantial improvement of macroeconomics as a science and as a tool to understand the working of today’s economic systems.

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