UNIVERSITY DAILY KANSAN
Wednesday, October 11, 1995
9A
U.S. economist wins Nobel
University of Chicago economics professors claim eight so far
The Associated Press
STOCKHOLM, Sweden — American Robert E. Lucas Jr. won the 1995 Nobel economics prize yesterday for deciphering how people's expectations of the future affect economies.
The prize is worth $1 million and will be awarded at a ceremony Dec. 10 in Stockholm.
"The practical implication of my work has been, along with others, to make us a lot more skeptical about our ability to use monetary policy to fine-tune the economy," Lucas said.
Lucas, a professor at the University of Chicago since 1975, is the eighth Nobel economics laureate from the school, which has had more economics prize-winners in its staff than any other university.
"Robert Lucas is the economist who has had the greatest influence on macroeconomic research since 1970," the Royal Swedish Academy of Sciences said in its citation. Macroeconomics deals with the relationships between different aspects of an economy such as wages, supply and demand, and inflation.
The United States has dominated the economics prize since its inception, producing 24 of 38 winners.
Born in Yakima, Wash., in 1937, Lucas was credited with demolishing incorrect economic theories and laying the ground for new ones now used by governments around the world.
His work centered on rational expectations — a term describing the way households or firms use information about the future to make financial decisions.
Among his achievements was the Lucas critique, in which he demonstrated that shifts in economic policy often produce a completely different outcome if people adapt their expectations to new policy stances.
He also showed how governments should modify their economic policies based on changed expectations after shifts in tax rates, exchange rates or jobless benefits.
1989 1990 1991 1992 1993 1994
Trygve Haavelmo
Norway Harry M. Markowitz, William F. Sharpe, Merton H. Miller U.S.
Ronald H. Coase U.K. U.S.
Gary S. Becker U.S.
Robert W. Fogel, Douglas C. North U.S.
John Hansanyl John Nash, U.S. Reinhard Selten, Germany
"Rational expectations are genuinely forward looking," according to the citation.
Knight-Ridder Tribune
SOURCE: World Almanac
Lucas provided the means for rapid development of macroeconomic analysis and eventually became part of the standard toolbox used by all economists, according to the citation.
ground for fields such as rational expectation econometrics, equilibrium theory of business cycles, investment theory and financial economics.
He was credited with laying the
Lucas did most of his groundbreaking work in the 1970s.
Nunn sits on fence about future plans
The Associated Press
ATLANTA — Sen. Sam Nunn, the eighth Senate Democrat to announce his retirement, said yesterday that he wanted to see President Clinton's agenda before he decided whether to support Clinton next year.
"I want to see what his vision for the next four years is, and I'm sure we'll be discussing that," Nunn said on the "Todav" show.
He said he expected to support the president's re-election bid, but he would watch to see if a third-party candidate would run for the White House.
Nunn, 57, said Monday he would not seek re-election in 1996. He said he had no plans to run for another legislative job, but supporters suggested that Nunn would run for governor in 1998.
Nunn, who flirted with the 1988 Democratic presidential race, has been mentioned as a possible third-party candidate next year. Asked if he thinks a third party is necessary, Nunn said:
"I would hope it's not necessary, and at this point in time, I do not. But I would not exclude that in the future, because the wings — the left wing of the Democratic Party, the right wing of the Republican Party
— tend to dominate, and I think the average American ... feels left out of the process.
"I think we're going to have a third party unless the two parties show that they represent not just the special interests and the money interests," he said.
The Georgia Democrat said Monday that he had decided that he did not have the enthusiasm for a fifth Senate campaign and another six years in Washington.
"I've always relished the six-year term, but not this time," he said. "I have always been absolutely certain that I was going to remain enthusiastic and dedicated for the whole six years, and this time I didn't have that."
Nunn's decision made it increasingly unlikely that Democrats can recapture control of the Senate next year. The GOP has a 53-46 edge, and Nunn is the eighth Democrat up for re-election in 1996 to retire, compared with one Republican.
Nunn, who was chairman of the Senate Armed Services Committee until the Republicans captured control of Congress last year, said that his decision had been based on his age and his interest in doing something else in life.
"I think there are other things I will enjoy," he said.