Work

The Lucas Critique in Practice: Theory Without Measurement

Year: 1995

Type: article

Abstract: This paper investigates the empirical relevance of the Lucas critique. A database is constructed of all articles in the Social Science Citation Index that cite Lucas (1976). Those articles are characterized by the nature of the article, the context in which Lucas (1976) is cited, and the evidence presented on the Lucas critique. Virtually no evidence exists that empirically substantiates the Lucas critique. Empirical refutation of the Lucas critique by using tests of super exogeneity is illustrated with U.K. money demand. Numerous other studies similarly refute the Lucas critique for various empirical macro-economic relations.

Source: International Finance Discussion Paper

DOI: 10.17016/ifdp.1995.506

Authors: Neil R. Ericsson, John S. Irons

Institutions: Federal Reserve, Federal Reserve Board of Governors, Amherst College

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

OpenAlex ID: W1568301880

FWCI: 18

Cites:

Cited by: 146

Related to: 10