Lucas’ expectational equilibrium, price rigidity, and descriptive realism

Robert Lucas' ([1972b] 1981a) article on the neutrality of money represented first effective challenge to Samuelson’s neoclassical synthesis methodological separation between static microeconomic optimisation and macroeconomic dynamics. Lucas rejected disequilibrium price dynamics, as expressed by Walrasian tâtonnement auctioneer mechanisms. Lucas’ new treatment equilibrium an expectational concept, determined rational behaviour information processing agents, was not restricted market clearing competitive economies. effort compare alternative expectations models stickiness (including his 1972 original formulation) led him stress notion descriptive realism models’ main assumptions, which played important role in discussion model robustness.