Is Robert Lucas a Keynesian?

4 July, 2017 at 10:30 | Posted in Economics | Comments Off on Is Robert Lucas a Keynesian?

In his Keynote Address to the 2003 History of Political Economy Conference, Nobel laureate Robert Lucas said:

Well, I’m not here to tell people in this group about the history of
monetary thought. I guess I’m here as a kind of witness from a vanished
culture, the heyday of Keynesian economics.

keynesdanceMy credentials? Was I a Keynesian myself? Absolutely …

I thought when I was trying to prepare some notes for this talk that people attending the conference might be arguing about Axel Leijonhufvud’s thesis that IS-LM was a distortion of Keynes, but I didn’t really hear any of this in the discussions this afternoon. So I’m going to think about IS-LM and Keynesian economics as being synonyms. I remember when Leijonhufvud’s book came out and I asked my colleague Gary Becker if he thought Hicks had got the General Theory right with his IS-LM diagram. Gary said, “Well, I don’t know, but I hope he did, because if it wasn’t for Hicks I never would have made any sense out of that damn book.” That’s kind of the way I feel, too, so I’m hoping Hicks got it right.

Mirabile dictu!

What Lucas is saying is “I’m a Keynesian — although I haven’t understood anything of what Keynes wrote, but I’ve read another guy who said he had read his book, so I hope for the best and assume he got it right.”

Well, Hicks actually didn’t get it right, as he was intellectually honest to admit in at least three scientific publications published about twenty years before Lucas statement.

Lucas statement is in truth a typical example of the Chicago science attitude. No wonder the guy after having deluded himself into believing being a Keynesian — although actually only elaborating upon a model developed and then disowned by John Hicks — got a ‘Nobel prize’ in economics …

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