Exchange Currency

Lucas critique

The observation that economic equations estimated under one policy regime are unlikely to be valid under another policy regime, since market participants will take the policy regime into account in forming their behavior. What is needed is to model rational expectations, which internalize all information, including the policy regime. Due to Lucas (1976).

Related information about Lucas critique:
  1. Lucas critique - Wikipedia, the free encyclopedia
    The Lucas critique, named for Robert Lucas' work on macroeconomic policymaking, argues that it is naïve to try to predict the effects of a change in economic ...
     
  2. Noahpinion: The Lucas Critique and the hard-money consensus
    Jul 22, 2012 ... The Lucas Critique is simple, and it is correct. If you have a model of the economy that works pretty well, and you try to use that model to predict ...
     
  3. Lucas critique : The New Palgrave Dictionary of Economics
    Abstract. The 'Lucas critique' is a criticism of econometric policy evaluation procedures that fail to recognize that optimal decision rules of economic agents vary ...
     
  4. Notes on the Lucas Critique, Time Inconsistency, and Related ...
    Leigh Tesfatsion (Prof. of Econ, Iowa State University, Ames, IA 50011-1070). Last Updated: 25 February 2012. Course Site for Econ 502 (M.S. Macro Theory) ...
     
  5. The Lucas Critique in Practice: An Empirical Investigation of ... - RePub
    JEL 1320 3110. Keywords: Lucas Critique, Monetary Union, Term Structure ... suggests that the Lucas Critique is relevant in the analysis of the impact of the ...
     
  6. Assessing the Lucas Critique in Monetary Policy Models - CiteSeer
    the standpoint of the Lucas critique, the most interesting result from these ... policy shifts, the Lucas critique suggests that lagged autoregressive models will be ...
     
  7. Econometric Policy Evaluation
    ECONOMETRIC POEICY EVALUATION: A CRITIQUE. Robert E. Lucas, Jr. 1. Introduction. Tile fact that nominal prices and wages tend to rise more rapidly at tile ...
     
  8. Lucas Critique - Financial Dictionary - The Free Dictionary
    Lucas Critique. Also found in: Wikipedia, 0.02 sec. Lucas Critique. The concept that one cannot draw accurate conclusions about present macroeconomic ...