Robert Lucas
I learned that Bob had read the article (Sargent, 1977) when he called me on the telephone to tell me that the director of the research department of the Federal Reserve Bank of Boston had invited him to write for the Bank’s annual Martha Vineyard Lecture – an article that explains in “plain English” what rational expectations macroeconomics really is, without being cluttered with equations. Bob suggested that we join forces and write a joint paper for the conference, so we wrote After Keynesian economics (Lucas & Sargent, 1979) and we both traveled to Martha’s Vineyard in June to attend the conference.
I submitted our article at Bob’s request. Ben Friedman talked about it. Ben wanted the public to know that he really didn’t like the line of research described in the article. He hated it so much that he announced to the audience that when he quoted or paraphrased us, he would put on a black hat and when he said what he thought himself, he would wear a white hat. So Ben turned the hats on and off, causing the audience to laugh every time he changed hats. The audience liked it. Bob wasn’t amused, and neither was I. But actually, the hat change was the best part of Ben’s discussion. Ben didn’t have much to say except that he didn’t like what we were doing.
This is from Thomas J. Sargent,”Learn from Lucas.” These are his memories of how he learned from Robert E. Lucas. It gets pretty technical. The reason I quote the above is that it depicts a mindset that a number of center-left establishment economists had then and many of their counterparts have now. As you can see in the quote above, Tom Sargent’s conclusion was that Ben Friedman was substituting ridicule for analysis.
Here is my bio of Sargent in David R. Henderson, ed., The Concise Encyclopedia of Economics.