[Bob Lucas passed away on May 15, 2023, and I wrote this on May 15, 2023.]
Bob Lucas, who passed away earlier today, was a kind and gracious person and scholar, and of course a renowned economist. When I was at Chicago in the 1990s, I was one of four or five folks, along with Lucas, who shared the same secretary, Shirley Ogrodowski, whose office was just outside his office. I rarely asked Shirley to do anything (maybe mail out working papers when people requested them), but I remember her typing up papers that David Galenson wrote in longhand. Shirley would occasionally smoke cigarettes in her office, and I once asked Bob if that bothered him, as he was a reformed smoker. Bob said that it didn’t affect him because he craved cigarettes regardless if anyone around him smoked. This response typified his honesty and directness, but especially his affability.
I think I only once talked with him in detail about a model (it was what eventually became my 1999 paper on common knowledge and money neutrality) and he was very supportive, as he consistently was to all assistant professors. Looking from the outside, the macro community in general always seemed a little closed and opaque to me, but I never received the slightest feeling from Lucas, or anyone else at Chicago, that money neutrality was not something I could work on because I was not trained as a macro person. My model was a simple modification of the Chatterjee-Samuelson-Myerson bilateral auction model, and I was surprised that he knew about pretty detailed stuff in the auction literature, such as the Satterthwaite-Williams models of k-double auctions. He clearly was very devoted to micro-models of trade and how they could be used to understand what we would consider macroeconomic phenomena. This was quite a contrast to most macro models I had seen, which assumed macro actors and variables right from the start or assumed very little heterogeneity among people (i.e. a single consumer). For Lucas, there was no micro vs. macro economics, there was only economics. Everything was something that he, and every intelligent economist, should be interested in.
I remember at lunch one time a bunch of us were talking about the effects of longer lifespans on individual life decisions, and I remarked that we might expect people to spend 10-12 years in graduate school, get two PhDs, etc. so they could build up a large amount of human capital to use over several decades. Bob immediately replied that he didn’t think it worked that way. Rather, he thinks of it as all of us learning new things as we go, building human capital throughout our entire lives. Hearing this from one of the world’s leading economists was quite a revelation. Bob did not think he was being modest or “dispensing wisdom”; he was simply being matter-of-fact. It was like the famous quote by Pablo Casals who, when asked why, as one of the greatest cellists ever, he still practices four hours a day at the age of 80, replied, “because I think I am making progress,” but in some sense with greater ambition and modesty. The closer analogy would be Pablo Casals picking up the trumpet, as Bob would not think it unreasonable to learn an entirely new set of tools if you thought it could help you understand something important.
Later I read somewhere about how Bob, as an assistant professor at Carnegie Mellon in the 1970s, learned from scratch dynamic programming (along with people including Nancy Schwartz and Mort Kamien, who were also assistant professors at the time—I think Tom Sargent was also there in some capacity?). Dynamic programming is a bunch of mathematical tools that enable you to understand how people make consumption and investment decisions over time, for example how an expected income boost years from now affects your consumption today. Most assistant professors now don’t have the time to learn a whole new set of tools, but Bob took the time because he thought it was important and necessary (which it was), and this of course proved crucial to the development of macroeconomics.
By the way, I once asked Tom Sargent if, when he was learning dynamic optimization, he had been exposed to any game theory (most game theorists suspect that rational expectations is basically the same thing as Nash equilibrium), and Tom said that he believed that if he and some of his contemporaries had known more game theory at the time, that modern macro probably would have developed in a completely different way, in close cooperation. Again, there was no idea that you should use tool X to study topic Y and tool Z was not appropriate because no one else was using it. If you were interested in topic Y, use and learn everything you can to study topic Y.
Bob’s undergraduate major was history (at the University of Chicago), and I remember him saying that he came back to Chicago for graduate school to study with Hirofumi Uzawa, a pretty hard-core mathematical economist. When I heard this, I marvelled at the intellectual distance traveled, from probably the least theoretical (or at least mathematical) part of social science (history) to the most theoretical (mathematical economics), in just a few years. Again, for scholars like Bob, if you were interested in something, you did what you needed to do to understand it. I also think of Bob’s trajectory when people say that being interested in technical stuff necessarily takes away from being interested in a real-world question. The real-world question is the reason that we got technical.
One thing I remember Bob saying is, “Don’t let the data beat you up too much.” I was a little confused by this at first, because all theorizing is supposed to be informed by data, but what he meant was that when you start developing a theory, it is all too easy to find things that contradict it. You have to believe in yourself, develop your theory and give it its own strength.
I remember Bob saying once that he really liked Chicago undergrads because he felt that he could have a real conversation with any of them, which was probably true. Many excellent scholars, when talking to people below them in the hierarchy (undergraduates, graduate students, assistant professors, etc.) assume a position of superiority, however mild. The way that Lucas talked to us assistant professors was that he expected to learn something from us. You got the feeling that he would not be the least bit surprised if one of us turned out to do something really good. Later, as a teacher, I began to understand that a student becomes empowered simply when you listen to them with genuine curiosity and simple respect. You don’t have to do anything more than this for growth to happen. Lucas did this for us in a completely unself-conscious way, because that’s just the way he talked to people. Sometimes when I hear people make a stark distinction between research and teaching, I think that they have an impoverished vision of both research and teaching. The researcher must approach the world with humility and respect, and must listen closely with genuine curiosity and openness without self-imposition, and these values sustain the best teaching.
I don’t know if they still do this, but at Chicago in the 1990s, the annual department party was held on the same day as the day the economics Nobel prize was announced, so that if one member of the department received the prize, there would be a party already set to go. This planning could be seen as presumptuous but was more than reasonable given objective probabilities. I remember at one of these parties, after Robert Fogel was awarded the prize, he asked Gary Becker if he should buy futures on the Swedish krona, and I wasn’t sure if he was joking, and also I remember appreciating how rare such a conversation must be. Of course, it was kind of awkward being in the close proximity of such luminaries. Later in the year, there would be a formal party to celebrate the recipient, and the first time this happened, I remember buying a (used) tuxedo because I thought that this would be cheaper than renting several times, if more colleagues received the prize, and it turned out that I was right.
Anyhow, in part because of this party, we were all pretty aware of when the Nobel announcement would be made, and I remember hearing Bob’s name on the morning radio news (it must have been WBEZ in Chicago). I was riding into the department on my bicycle, and Bob and Nancy Stokey passed me in their car waving, and it was so lovely on that crisp autumn day to share that happy moment with them and congratulate them both.