Robert Lucas Jr. Quotes

There is one policy for recession or depression and another for good times.

Importantly, in the 1930s, in the Great Depression, the Federal Reserve, despite its mandate, was quite passive and, as a result, financial crisis became very severe, lasted essentially from 1929 to 1933.

We have fluctuations all the time, business cycles, and they come about in various ways, but normally what sets them off is some reduction in the willingness of our population, our businesses, and foreigners to buy.

To pump up consumer or government demand would force interest rates up and asset prices down, possibly by enough to destroy more jobs than are created.

I think the Fed is not designed to have effective tools to deal with the economy. It should settle for just controlling the money supply. And - if it insists, it can worry about inflation.

When the economy shows signs of faltering, prompt countermoves are required. Even mild measures on the part of government can be effective in the early stages of an economic decline. ... If action is withheld until a recession has gained momentum, strong and costly measures may prove insufficient.

It is well enough that the people of the nation do not understand our banking and monetary system for, if they did, I believe there would be a revolution before tomorrow morning.

Demonetisation is a disinflationary process. So, this will bring down prices in the long run. It will also help in bringing down interest rates.

Any organisation has to go through at least one depression to see how it survives, and a normal economic cycle takes seven years.

If the Fed is omniscient, why didn't they pull back on the excess money supply that inflated the massive housing bubble that popped so disastrously back in 2008?

Even if consumer confidence hit rock bottom, that most likely would not be enough, by itself, to cause a depression.

At the federal level, the fiscal stimulus of 2008 and 2009 supported economic output, but the effects of that stimulus faded; by 2011, federal fiscal policy actions became a drag on output growth when the recovery was still weak.

It would be helpful if someone would lay out exactly the economic mechanism that gets us from yet lower interest rates to actual economic activity.

There is always the potential for a central bank to engage in discretionary monetary policy and to break the one-to-one link between changes in foreign reserves and changes in the money supply.

It is no longer a matter of serious controversy whether the government should play a positive role in helping to maintain a high level of economic activity. What we debate nowadays is not the need for controlling business cycles, but rather the nature of governmental action, its timing and its extent.

The bankers of the country are more to blame than are any other group for the present depression.

Advocates of pump priming forget that they are draining the well.

From now on, depressions will be scientifically created.

We are all Keynesians now.

If only we can avoid a repetition of the depression that culminated in Mr. Hoover's Administration, we will be very fortunate. This depression, of course, had nothing to do with President Hoover's policies, but was the result of after-war activities by certain groups in this country which, I fear, may be duplicated again unless the people and the Congress are very wary.

… a depression is for capitalism like a good, cold douche.

Can we prevent an almost complete collapse of the financial structure of modern capitalism? With no financial leadership left in the world and profound intellectual error as to causes and cures prevailing in the responsible seats of power, one begins to wonder and to doubt.... The financial and political authorities of the world have lacked the courage or the conviction at each stage of the decline to apply the available remedies in sufficiently drastic doses; and by now they have allowed the collapse to reach a point where the whole system may have lost its resiliency and its capacity for a rebound.

Every economic downturn suffered by this country over the past century can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial 'boom' followed by a recession or depression when the Fed-created bubble bursts.

It is impossible, financially and politically, to lower expenditure to the level of our revenues in the calamitous times in which we live, and so, however painful and afflicting the idea may be, we must exist from day to day and simply await the outcome of events yet in the making …

Supply can create its own demand.