I
was born in 1937, in Yakima, Washington, the oldest child of Robert Emerson
Lucas and Jane Templeton Lucas. My sister Jenepher was born in 1939 and my brother
Peter in 1940. My parents
Casinos had moved to Yakima from Seattle, to open a small
restaurant, The Lucas Ice Creamery. The restaurant was a casualty of the 1937-38
downturn, and during World War II our family moved to Seattle, where my father
found work as a steamfitter in the shipyards and my mother resumed her earlier
career as a fashion artist. My brother Daniel was born in Seattle in 1948.
My parents were admirers of President Roosevelt and the New Deal. Their parents
and most of our relatives and neighbors were Republicans, so they were self
conscious in their liberalism and took it as emblematic of their ability to
think for themselves. The idea that one could decide for oneself what kind of
person to be, and that one ought to think about these decisions, was not limited
to politics. I remember discussions, with my mother especially, of religion
(she was a liberal protestant), of decor (she favored hardwood floors and oriental
rugs), even on how to choose what kind of cigarette to smoke.
After the war, my father found a job as a welder at a commercial refrigeration
company, Lewis Refrigeration. He became a craftsman, then a sales engineer,
then sales manager, and eventually president of the company. He had no college
degree and no engineering training, and learned the engineering he needed from
the people he worked with and from handbooks. I remember many technical and
managerial discussions with him, as well as our ongoing political arguments.
When I took calculus in high school, he enlisted my help on a refrigeration
design problem he was working on-and actually used my calculations! It was my
first taste of real applied mathematics, and an exciting one.
I attended Seattle Public Schools, graduating from Roosevelt High School (where
my parents had graduated in 1927) in 1955. I was good at math and science, and
it was expected that I would attend the University of Washington in Seattle
and become an engineer. But by the time I was seventeen I was ready to leave
home, a decision my parents agreed to support if I could obtain a scholarship.
MIT did not grant me one but the University of Chicago did. Since Chicago did
not have an engineering school, this ended my engineering career. But when I
began the 44 hour train trip "back east" to Chicago, I was pretty sure something
interesting would turn up.
What to do instead? I took some mathematics at Chicago, but lost interest soon
after my courses got past the material I had half learned in high school. I
did not have the nerve to major in Physics, which is what you did at Chicago
in those days if you thought you could make it. The real excitement for me was
in the liberal arts core of the Chicago College, courses from the Hutchins era
with names like History of Western Civilization, and Organization, Methods,
and Principles of Knowledge. Everything in these courses was new to me. All
of them began with readings from Plato and Aristotle, and I wanted to learn
all I could about the Greeks. I took a sequence in Ancient History, and became
a history major. Though I had no real idea what a professional historian does,
I had learned that one can make a living by pursuing one's intellectual interests
and writing about them. I began to think about an academic career.
I obtained a Woodrow Wilson Doctoral Fellowship, and entered the graduate program
in History at the University of California. With no Greek or French and minimal
Latin and German, I was in no position to pursue my classical interests, so
I began work at Berkeley with little more than an open mind. The most exciting
modern historian I had read at Chicago had been the Belgian historian Henri
Pirenne, whose account of the end of the Roman era stressed the continuity of
economic life in the face of major political disruptions. For me, Pirenne's
shift of focus away from emperors and dreary Merovingian kings and on to the
daily lives of private citizens was novel and exciting, and fit my sense of
what was important. At Berkeley, I took courses in Economic History and audited
an economic theory course. I liked economics at once, but it was obvious that
to apply it with any confidence I would need to know much more than I could
pick up on the side as a history student. I decided to move into economics and,
since there appeared to be no hope of financial support from Berkeley's Economics
Department, I returned to Chicago. During the rest of that academic year I took
some undergraduate economics at Chicago and one or two graduate courses, to
prepare for my real start as a graduate student the next fall.
It was lucky for me that one of my undergraduate texts referred to Paul Samuelson's
Foundations of Economic Analysis as "the most important book in economics
since the war." Both the mathematics and the economics in Foundations were way
over my head, but I was too ambitious to spend my summer on the second most
important book in economics, and Samuelson's confident and engaging style kept
me going. All my spare time that summer went in to working through the first
four chapters, line by line, going back to my calculus books when I needed to.
By the beginning of fall quarter I was as good an economic technician as anyone
on the Chicago faculty. Even more important, I had internalized Samuelson's
standards for when an economic question had been properly posed and when it
had been answered, and was in a position to take charge of my own economic education.
In the fall of 1960, I began Milton Friedman's price theory sequence. I had
been looking forward to this famous course all summer, but it was far more exciting
than anything I had imagined. What made it so? Many Chicago students have tried
to answer this question. Certainly Friedman's brilliance and intensity, and
his willingness to follow his economic logic wherever it led all played a role.
After every class, I tried to translate what Friedman had done into the mathematics
I had learned from Samuelson. I knew I would never be able to think as fast
as Friedman, but I also knew that if I developed a reliable, systematic way
for approaching economic problems I would end up at the right place.
Friedman's course ended my long career as a conscientious, near-straight A student.
Now if a course did not promise to be a life-changing experience, I lost interest
and attended only sporadically. I accumulated many C's, but also a lot of time
to pursue what I found interesting. I took my first rigorous analysis courses,
and a statistics course using
TexasHoldEm Volume I of Willam Feller's An Introduction
to Probability Theory and Its Applications. I still pick up Feller's book
from time to time, as I do Samuelson's, just for the pleasure of the author's
company.
There was also plenty of interesting economics going on at Chicago. My interest
in probability and statistics stemmed from an interest in econometrics, stimulated
by courses of Zvi Griliches and Gregg Lewis. Donald Bear, a new Assistant Professor
from Stanford, taught a valuable mathematical economics course, and gave valuable
encouragement to technically inclined students. Arnold Harberger's sequence
in public finance was a lasting influence on me too. My thesis, which used data
from U.S. manufacturing to estimate elasticities of substitution between capital
and labor, was written under Harberger and Lewis, and was part of a larger project
of Harberger's analyzing the effects of various changes in the U.S. tax structure.
There was a terrific collection of students at Chicago in the early 1960s. My
closest friends were Glen Cain, Neil Wallace, Sherwin Rosen, and G.S. Maddala,
and there were many others who now have international reputations. For many
of us, the shock wave of Friedman's libertarian-conservative ideas forced a
rethinking of our whole social philosophy. Intense student discussions ranged
far beyond technical economics. I tried to hold on to the New Deal politics
I had grown up with, and remember voting for Kennedy in 1960. "Nixon? Bob, you
couldn't," my sister had said, and she was right (for then!). But however we
voted, Friedman's students came away with the sense that we had acquired a powerful
apparatus for thinking about economic and political questions.
In 1963 Richard Cyert, the new Dean of the Graduate School of Industrial Administration
at Carnegie Institute of Technology (now Carnegie-Mellon University), offered
me a faculty position. I had met Allan Meltzer and Leonard Rapping at my job
seminar there, and I knew GSIA would be a stimulating and congenial place for
me. GSIA's leading intellectual figure was Herbert Simon. Although Simon was
no longer working in economics when I came to Carnegie, he was always ready
to talk about economics (or any other area of social or management science)
at lunch or coffee. He gave all of us at GSIA the feeling of being in the major
leagues, and helped us to outgrow the sense that all the important work was
going on at Chicago or Cambridge.
Once my thesis was finished, I began theoretical work on the decisions of business
firms to invest in physical capital and in improved technology. Dale Jorgenson
had served on my Chicago thesis committee, and his work on investment had stimulated
me. I spent a lot of time in my first years at Carnegie Tech learning the mathematics
of dynamical systems and optimization over time, and trying to see how these
methods could best be applied to economic questions. Economists of my cohort
all over the world were engaged in this enterprise in the 1960s, and I remember
exciting conferences on this theme at Chicago and Yale, led by Hirofumi Uzawa.
During my years there, Carnegie-Mellon had a remarkable group of economists
interested in dynamics and the formation of expectations. Foremost, of course,
was John Muth, my colleague in my first three years there. Morton Kamien and
Nancy Schwartz had come from Purdue about the time I came from Chicago. Dick
Roll, a student of Eugene Fama's at Chicago, brought the ideas of efficient
market theory to GSIA. Thomas Sargent came to Carnegie-Mellon from Harvard in
the middle of writing his thesis, and I remember the discussions he and Roll
had about interest rates (that none of the rest of us could follow). Morris
DeGroot taught a course in statistical decision theory that influenced Edward
Prescott, and through Ed, me. John Bossons and later Michael Lovell studied
direct evidence on expectations. It would be hard to think of a better group
of colleagues, given my interests
Blackjack in economic dynamics.
At Carnegie I became involved in two collaborations, both of which bore immediate
fruit and also influenced my thinking for years afterward. One of these was
a project with Leonard Rapping, my closest friend and colleague at that time,
in which we undertook to provide a neoclassical account of the behavior of U.S.
wages and employment from 1929 to 1958. The paper was a bolder step into new
territory than I would have taken then on my own, and the project never would
have been undertaken or completed without Leonard's confidence and his expertise
in labor economics.
Edward Prescott had come to GSIA as a doctoral student in the same year I joined
the faculty, and we were immediate friends. A few years later, when Ed had become
a faculty member at Penn, I enlisted his help on a theoretical project I had
begun on the dynamics of an imperfectly competitive industry. That problem defeated
us, but in the course of failing to solve it we found ourselves talking and
corresponding about everything in economic dynamics. In a couple of years we
learned large chunks of modern general equilibrium theory, functional analysis,
and probability theory, and wrote a paper, "Investment under Uncertainty," that
reformulated John Muth's idea of rational expectations in a useful way. During
this brief period my whole point of view of economic dynamics took form (along
with Ed's), in a way that has served me well ever since.
David Cass, who came to Carnegie-Mellon in 1971, had earlier aroused my interest
in Samuelson's overlapping generations model of a monetary economy. At about
the same time, Edmund Phelps convinced me that Rapping's and my model of labor
supply needed to be situated in a general equilibrium context. These influences,
combined with much that I had learned working with Prescott, came together in
my paper, "Expectations and the Neutrality of Money," which was completed in
1970 and published in 1972. The role of this paper, certainly the most influential
of my writings, is one of the subjects of my Nobel lecture. In May, 1995, Rao
Aiyagari organized a 25th Anniversary
Poker Conference for this paper, sponsored by
the Federal Reserve Bank of Minneapolis. This occasion ranks high among the
professional pleasures and honors I have received.
In 1974 I returned to Chicago as a faculty member. In 1980 I became the John
Dewey Distinguished Service Professor at Chicago, the position I hold today.
Chicago has been a marvellous place for me, as I knew it would be from my student
experiences, and I have been stimulated by colleagues and graduate teaching
into research on monetary theory, international-trade, fiscal policy, and economic
growth: all the basic topics in macroeconomics. But the main features of one's
approach to science, like the main features of one's personality more generally,
are set early on. For me, the influences of my parents, my undergraduate and
graduate years at Chicago, and my years at Carnegie Mellon were critical, so
it is these influences I have focused on here.
I have had a rewarding personal life, intertwined with the intellectual life
that I have described in these notes. Rita Cohen, also an undergraduate at Chicago,
and I were married in New York in August, 1959, just before I began graduate
studies at Berkeley. Our son Stephen was born in Chicago in September, 1960.
Our son Joseph was born in Pittsburgh in January, 1966. Steve is now a securities
trader at the Chemical Bank in New York. Joe is a graduate student in History
at Boston University, and his wife Tanya is a resident at Beth Israel Hospital
in Boston. Rita and I were separated in 1982, and divorced several years later.
Since 1982 I have lived with Nancy Stokey, who is now a colleague of mine at
Chicago. We have collaborated in papers on growth theory, public finance, and
monetary theory. Our monograph,
RelationshipsRecursive Methods in Economic Dynamics, was
published in 1989. Since then, our collaboration has been a domestic one only
. We have an apartment on Chicago's north side, and a summer house on Lake Michigan,
in Door County, Wisconsin.
From Les Prix Nobel. The Nobel Prizes 1995, Editor Tore Frängsmyr, [Nobel Foundation], Stockholm, 1996
This autobiography/biography was written at the time of the award and later published in the book series Les Prix Nobel/Nobel Lectures. The information is sometimes updated with an addendum submitted by the Laureate. To cite this document, always state the source as shown above.