A Critique of Lucas’ Theory

Masayuki Otaki

Chapter 14 in Keynesian Economics and Price Theory, 2015, pp 177-190 from Springer

Abstract: Abstract Lucas Lucas ’ theory contains two theoretical problems that are not yet solved. One is whether he succeeds in deriving the objective cumulative density function (CDF) from an arbitrarily given subjective CDF. In this section it is shown that this question must be answered in the negative. Further, even though an individual can directly collect noisy information concerning the true state of an economy and not through the equilibrium price, it is still debatable whether the simplified signal extraction problem signal extraction problem is precisely formatted in his model. It is shown here that this procedure is also imprecise, and that it is necessary to provide an additional condition that completes the existence proof.

Keywords: Neutrality of money; Rational belief; Intrinsic value of money; Functional equation (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:advchp:978-4-431-55345-8_14

Ordering information: This item can be ordered from
http://www.springer.com/9784431553458

DOI: 10.1007/978-4-431-55345-8_14

Access Statistics for this chapter

More chapters in Advances in Japanese Business and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().