OK, something that isn't about the d*** c*******. Obituaries have acknowledged his brilliance and huge influence, all of which is true. But I think it's important to realize that his project to reform macroeconomics was a failure 1/
Lucas sought to make business cycle theory a branch of conventional microeconomics, with perfectly rational individuals and all markets in equilibrium. But in such a world, how can decisions by central banks have large real consequences? 2/
After all, with flexible prices and rational actors, money should be "neutral" — double the money supply, and all prices will double, with no effect on the real economy, which only depends on *relative* prices 3/
Lucas had an ingenious answer: in the short run, people can't tell the difference between changes in the overall price level, which they shouldn't respond to, and changes in the relative price of their product, which should elicit changes in supply 4/
So the "Lucas supply curve" said, basically, that the Fed can induce a recession for a while because people don't know that they're in a recession — they think they're facing idiosyncratic demand shocks 5/ https://users.ox.ac.uk/~exet2581/msc/ec924lucas.pdf
But this approach quickly ran aground in the face of both evidence and theory. Let me poach one of the (lovely) graphics from my soft-landing piece. The era of elevated unemployment in the 80s lasted eight years 6/
Do we really think people went through this whole period believing that they were facing negative demand shocks specific to their own businesses, not a generally depressed economy? 7/
It also became clear that if you assume that people have access to all public information — which Lucas-type models do — people can tell that they're facing contractionary monetary policy by looking at interest rates 8/
By the mid-80s, then, the Lucas model of the business cycle had intellectually imploded. Unfortunately, by then many macroeconomists had invested all their intellectual capital in this failed project, and refused to give up 9/
This had dire consequences for the profession. But that's a topic for another day 10/
Aha. One additional observation: if you really believed in the Lucas model, disinflation right now should be no problem at all. All the Fed has to do is credibly commit to 2 percent inflation, and presto, we have 2% inflation, without a recession 11/
従って「ルーカス供給曲線」によれば、基本的にFRBは一時的な不況を引き起こすことができる。というのは人々は自分が不況下にあることを知らないからである――彼らは個別の需要ショックに直面していると考えている。 https://users.ox.ac.uk/~exet2581/msc/ec924lucas.pdf