Robert Lucas Jr.: Economy

“I do not see how one can look at figures like these without seeing them representing possibilities. Is there some action a government of India could take that would lead the Indian economy to grow like Indonesia's or Egypt's? If so, what exactly? If not, what is it about the "nature of India" that makes it so? 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.”

Robert Lucas Jr.

Robert E. Lucas, "On the Mechanics of Economic Development." Journal of Monetary Economics. 22 July, 1988, pp. 5: On economic growth

Question , Nature , Thinking

“So I am skeptical about the argument that the subprime mortgage problem will contaminate the whole mortgage market, that housing construction will come to a halt, and that the economy will slip into a recession. Every step in this chain is questionable and none has been quantified. If we have learned anything from the past 20 years it is that there is a lot of stability built into the real economy.”

Robert Lucas Jr.

Robert E. Lucas, "Mortgages and Monetary Policy", The Wall Street Journal WEDNESDAY, September 19, 2007

Question , Problem , Learning , Past

“In the present decade, the U. S. economy has undergone its first major depression since the 1930’s, to the accompaniment of inflation rates in excess of 10 percent per annum. These events have been transmitted […] to other advanced countries and in many cases have been amplified. These events did not arise from a reactionary reversion to outmoded, 'classical' principles of tight money and balanced budgets. On the contrary, they were accompanied by massive government budget deficits and high rates of monetary expansion, policies which, although bearing an admitted risk of inflation, promised according to modern Keynesian doctrine rapid real growth and low rates of unemployment. That these predictions were wildly incorrect and that the doctrine on which they were fundamentally flawed are now simple matters of fact, involving no novelties of economic theory. The task now […] is to sort through the wreckage, determining which features of that remarkable intellectual event called the Keynesian Revolution can be salvaged and put to use and which others must be discarded.”

Robert Lucas Jr.

As contained in The Rational Expectations Revolution: Readings From the Front Line https://en.wikiquote.org/wiki/Special:BookSources/0262631555, Preston J. Miller, MIT Press (reprint 1994), pp. 5-6
"After Keynesian macroeconomics" 1978

Money , Country