Robert Lucas Jr.

The problem of economic development is the problem of accounting for the observed diversity in the rates at which different countries grow.

The main contribution of rational expectations is to force economists to be explicit about how agents form expectations.

If one is to understand the effects of policy, one must understand how expectations are formed.

The central idea of rational expectations is that people use all available information efficiently.

The 'Lucas Critique' is simply the observation that parameters of econometric models are not invariant to changes in policy.

Macroeconomics is a field that has been in a state of continuous intellectual ferment for the last 30 years.

The welfare costs of business cycles are small.

Once one starts thinking about the problem of economic development, it is hard to think about anything else.

The history of economic thought is a history of mistakes.

The idea that people behave rationally is a powerful organizing principle for economic theory.

The challenge for macroeconomics is to build models that are consistent with microeconomic foundations.

The ultimate test of an economic theory is its ability to explain observed phenomena.

The idea of rational expectations is not that people are omniscient, but that they make the best use of the information they have.

Economic theory is not about predicting the future, but about understanding the past and present.

The role of the economist is to clarify the choices facing society, not to make them.

The most important thing I learned in graduate school was how to think like an economist.

The real business cycle theory is an attempt to explain business cycles as optimal responses to real shocks.

The challenge of economic growth is to understand why some countries are rich and others are poor.

The rational expectations revolution was a revolution in methodology, not in ideology.

The idea that money is neutral in the long run is one of the oldest and most robust propositions in economics.