The business cycle in the representation of Robert E. Lucas, Jr.

Abstract

In various forms, economists are still taking sustained action to find specific answers to questions related to the issue of economic fluctuations. In this context of continuing concerns, both the "old" classics and the "new" classics have made substantial progress in their own theories of the business cycle. If, in order to explain the economic fluctuations, the old classics based their theory on non-governmental intervention as well as on the flexibility of prices, wages and interests, the new classics transpose the same problem through a reference, mainly, to technological disturbances, information asymmetry, as well as to real business cycles. In general terms, it can be argued that the new classics continue to believe that the business cycle can be understood in an equilibrium-oriented market model, thus maintaining the classical equilibrium model.

This study represents a foray into the history of classical economic thinking, providing a current perspective on the main research directions of the new classical school in the field of business cycles in relation to the contributions made by economist Robert E. Lucas Jr