Global Markets Forum
April 9, 2008
Trade and the Diffusion of the Industrial Revolution
Robert E. Lucas, Nobel laureate in economics, discussed ideas from his working paper “Trade and the Diffusion of the Industrial Revolution,” which offers a model to understand growth rates over long periods. Open economies tend to grow faster, and among open economies, strong forces exist that help poor ones to grow faster than rich ones, said Lucas, John Dewey Distinguished Service Professor in the Department of Economics. But not all countries follow this pattern; convergence toward rich economies is most evident, said Lucas, in poor countries with environments— including education and political systems—that enable them to tap into these forces of convergence.Where
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Robert E. Lucas, Jr. is the John Dewey Distinguished Service Professor of Economics at the University of Chicago, where he has taught since 1975. He is a fellow of the Econometric Society, the American Academy of Arts and Sciences, and the American Philosophical Society, and a member of the National Academy of Sciences. He is a past president of the Econometric Society and the American Economic Association. In 1995, he received the Nobel Memorial Prize in Economic Sciences.
In announcing the award, the Royal Swedish Academy of Sciences recognized Lucas "for having developed and applied the hypothesis of rational expectations, and thereby having transformed macroeconomic analysis and deepened our understanding of economic policy." The announcement added that "His work has brought about a rapid and revolutionary development: application of the rational expectations hypothesis, emergence of an equilibrium theory of business cycles, insights into the difficulties of using economic policy to control the economy, and possibilities of reliably evaluating economic policy with statistical methods."
Lucas was born in Yakima, Washington in 1937. He was educated in the Seattle public schools, and attended the University of Chicago, where he received a BA in history in 1959 and a PhD in economics in 1964. He was a member of the faculty at Carnegie-Mellon University from 1963 until 1974.
His books include Studies in Business-Cycle Theory (1981), Rational Expectations and Econometric Practice (1981), co-edited with Thomas Sargent, Models of Business Cycles (1985), and Recursive Methods in Economic Dynamics (1989), with Nancy Stokey and Edward Prescott. Since 1985, the main focus of Lucas's research has shifted from business cycles and monetary theory to the study of economic growth and development. His Lectures on Economic Growth (2002) collects many of his writings on this topic.
This event is part of the Initiative on Global Markets and is generously sponsored by Myron Scholes. This presentation is co-sponsored by the Chicago Council on Global Affairs.
The Initiative also receives financial support from the Chicago Mercantile Exchange (CME) Trust and our corporate partners: AQR Capital Management, Barclays Bank PLC, John Deere, and Northern Trust Corporation.