Lucas critique

The Lucas critique is a arisen in the 1970s economic theoretical concept of modern macroeconomics, economic activities and their effects can be explained by the. Father of the concept is the Nobel laureate economist Robert E. Lucas. He criticizes ( hence the name) the existing macroeconomic models that they are based on static expectations. For a more meaningful Lucas suggested, however, provide for the incorporation of rational expectations.

The Lucas critique is: " Because the structure of an econometric model includes optimal decision rules of economic agents and creates the optimal decision rules to systematically change with the relevant for economic policy time-series data, any change in the economic policy will change the structure of the econometric model ."

Lucas criticized so that an economic law at the moment does not work anymore if the economic policy tries to exploit this. So if the economic policy will take, for example, on the basis of the Phillips curve to higher inflation into account, because this is related to the legality of the Phillips curve with lower unemployment, then the Phillip connection suddenly no longer applies. Give reasons for this can be the fact that a change in economic policy, the expectations of economic agents (and thus the scope of economic policy itself) affected.

The Lucas critique was therefore also a critique of the economic use of econometric models, since the behavior of the parameters used in these models are assumed to be exogenous, but in fact are endogenous.