What Is the Lucas Critique,and Why Was It So Important

question 70

Essay

What is the Lucas critique,and why was it so important to macroeconomists in the 1970s?

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Definitions:

Transverse Abdominis

A muscle layer of the anterior and lateral abdominal wall which is deep to (layered below) the internal oblique muscle.

Rectus Abdominis

A paired muscle running vertically on each side of the anterior wall of the human abdomen, involved in flexing the lumbar spine.

Pectoralis Group

A group of muscles located at the front of the chest, involved in movements of the shoulder and arm.

Clavicle

A long bone that serves as a strut between the shoulder blade and the sternum or breastbone, known colloquially as the collarbone.