Robert E. Lucas Jr. Won 1995 Nobel Prize for Rational Expectations Theory

Robert E. Lucas Jr., a research associate affiliated with the NBER's Program on Economic Fluctuations, won the 1995 Nobel Memorial Prize in Economic Sciences for his development and application of the hypothesis of rational expectations, which holds that people make economic choices based on their previous experiences and future expectations and shows that activist government policy to stabilize the economy could have no effect, or could make matters worse.

“Lucas’s pioneering work has created an entirely new field of econometrics, known as rational expectations econometrics … to identify the most efficient statistical methods for estimating economic relations where expectations are the key components,” the Royal Swedish Academy of Sciences said in announcing the award. It called him "the economist who has had the greatest influence on macroeconomic research since 1970.”

At the time of the award, Lucas was the John Dewey Distinguished Service Professor in Economics at the University of Chicago. 

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