Robert Lucas Jr. podcast

This is from Economics in Ten podcast, season seven, episode two. Robert Lucas was the leader of the New Classical school and the man most associated with putting Keynesian economics on the back foot in the 1970s. His ‘rational expectations’ hypothesis (the idea that people anticipate government policy and adjust their behaviour accordingly, which limits its effectiveness) is a useful idea for evaluating demand-side policy. The episode also covers the Lucas critique, his wedge and his paradox. One of the more directly spec-linked episodes of Season 7, accessible for students studying macro policy, and rational expectations provides a strong counter-argument to activist fiscal and monetary policy that is useful for evaluation.  Listen here