An Agenda Without a Plan: Robert E Lucas's Trajectory Through the Public Debate

Goutsmedt, Aurélien; Guizzo, Danielle; Sergi, Francesco

doi:10.2139/ssrn.3248550

Cited by 3 publications

(3 citation statements)

References 42 publications

(19 reference statements)

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“…Conversely, the aim of our historical investigation is to unveil how the Critique, instead of closing, opened a broader debate. In this sense, Lucas's contribution has been a starting point for the history of macroeconomics, and not an ending point or a "fatal strike" against a whole macroeconomics tradition, and so our assessment provides historical perspective to the ongoing debate on the relevance and interpretation of the Critique within today's DSGE approach (Sergi, 2018). The Keynesians' reactions to the Critique allow us to unveil and discuss the complexity of Lucas's original argument, which goes far beyond the logical syllogism proposed by the standard narrative.…”

Section: The Lucas Critique: a Cornerstone In The Standard Narrative mentioning

confidence: 99%

Reacting to the Lucas Critique

Goutsmedt¹,

Pinzón-Fuchs²,

Renault³

et al. 2019

History of Political Economy

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and two anonymous referees for their valuable comments on preliminary versions of this paper. The usual caveat applies. diversity, the Keynesians' reactions were characterized by their common questioning of the empirical and practical relevance of the Lucas Critique. 5 Indeed, these Keynesians took the Critique to have to pass an empirical test. An older generation a priori denied the Critique but put the burden of the empirical proof on new classical macroeconomists. Among those, we discuss the arguments and positions of Franco Modigliani, James Tobin, and Edmond Malinvaud (section 1). In the meanwhile, the empirical assessment of the Critique was further elaborated by a younger generation of Keynesians, among which we consider Alan Blinder, Olivier Blanchard, Robert Gordon and Stanley Fischer. Instead of putting the burden of the empirical proof on Lucas, these authors actively engaged with the econometric testing of parameters' instability, dismissing the Critique on empirical grounds (section 2). Finally, Robert Solow, together with other Keynesians involved in macroeconometric model building, such as Lawrence R. Klein, Otto Eckstein, and again, Fischer and Gordon, recognized that their models had not performed at their best during the stagflation period. Taking Lucas's argument seriously into account, they asked whether it provided a viable alternative to understand the economic context of the 1970s and finally argued that the Critique was not relevant for this purpose (section 3).

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Section: The Lucas Critique: a Cornerstone In The Standard Narrative mentioning

confidence: 99%

Reacting to the Lucas Critique

Goutsmedt¹,

Pinzón-Fuchs²,

Renault³

et al. 2019

History of Political Economy

Self Cite

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“…As Goutsmedt, Guizzo and Sergi (2019) pointed out, this ambivalent attitude towards engaging with the public debate was typical of Lucas.…”

mentioning

confidence: 99%

Macroeconomics at the Crossroads: Stagflation and the Struggle between "Keynesian" and New Classical Macroeconometric Programs

Goutsmedt¹

2019

Preprint

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Lucas and Sargent’s “After Keynesian Macroeconomics” is considered as a cornerstone of macroeconomics history and is supposed to have seriously undermined “Keynesian” approach to macroeconometric modelling. I study the context of this article, its writing, its presentation in a conference with many advocates of large-scale models and the debates that followed. I demonstrate that the issue of stagflation was closely linked to Lucas and Sargent’s argument, and the opposition of “Keynesians” relied on their different interpretation of stagflation. I show this interpretation of stagflation led to a different research program, which has been overlooked by history of macroeconomics.

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“…It is important to notice that this was more or less Olson's objective in the 1969 report(Fleury, 2010). Fleury (e-mail, 10/8/2018) argued that Olson "definitely believed that there was one and only social science: economics," thus his objective was still to propagate the rational choice theory through economics and other social sciences.20 Although Lucas himself had little influence on the political debate, his ideas reached relevant influence in policymakers(Goutsmedt, Guizzo, Sergi, 2018). Ideas from Kydland, Prescott, Sargent, Wallace and other are more related to the ideas Besley had in mind.…”

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confidence: 99%

From ‘What Is New Political Economy’ to ‘Why Is Everything New Political Economy?’

Almeida

2018

SSRN Journal

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An Agenda Without a Plan: Robert E Lucas's Trajectory Through the Public Debate

Cited by 3 publications

References 42 publications

Reacting to the Lucas Critique

Reacting to the Lucas Critique

Macroeconomics at the Crossroads: Stagflation and the Struggle between "Keynesian" and New Classical Macroeconometric Programs

From ‘What Is New Political Economy’ to ‘Why Is Everything New Political Economy?’

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