Deborah J. Lucas

About

Deborah J. Lucas is the Sloan Distinguished Professor of Finance at the MIT Sloan School of Management and serves as the Director of the MIT Golub Center for Finance and Policy. Her recent research focuses on the intersection of finance and policy, with an emphasis on applying financial economics to measure the costs and risks associated with government financial activities. Her work includes developing methods to evaluate the value of government subsidies to development banks and state-owned enterprises, improving measurement of fiscal and macroeconomic effects of credit support and guarantee policies, assessing the sustainability of pension systems, and analyzing government financial products such as reverse mortgages and mortgage credit risk transfer securities. Lucas has held numerous influential roles, including Research Associate at the National Bureau of Economic Research, member of the Academic Research Council of the Housing Policy Center at the Urban Institute, and trustee for the NBER pension plans. She has also served as chief economist and assistant and associate director at the U.S. Congressional Budget Office, and has been a visiting scholar at the IMF. Her expertise on U.S. federal credit programs has led her to testify before Congress on issues related to Fannie Mae, Freddie Mac, student loans, and financial institutions. She is a member of several prestigious organizations, including the National Academy of Public Administration and the Econometric Society,…

Research topics

• Business
• Computer Science
• Political Science
• Finance
• Public administration
• Virology
• Medicine

Selected publications

• The Equity Premium: It's Still a Puzzle

  RePEc: Research Papers in Economics · 2016-01-01 · 97 citations

  preprint

  average real return to stocks in United States has been about six percent per year higher than that on Treasury bills. At same time, average real return on Treasury bills has been about one percent per year. In this paper, I discuss and assess various theoretical attempts to explain these two different empirical phenomena: large and low free rate. I show that while there are several plausible explanations for low level of Treasury returns, large equity premium is still largely a mystery to econo…

  Publisher

• Measuring the Cost of Bailouts

  Annual Review of Financial Economics · 2019-11-26 · 72 citations

  articleOpen access1st authorCorresponding

  This review develops a theoretical framework that highlights the principles governing economically meaningful estimates of the cost of bailouts. Drawing selectively on existing cost estimates and augmenting them with new calculations consistent with this framework, I conclude that the total direct cost of the 2008 crisis-related bailouts in the United States was on the order of $500 billion, or 3.5% of GDP in 2009. The largest direct beneficiaries of the bailouts were the unsecured creditors of…

  PublisherOA PDFDOI

• Credit Policy as Fiscal Policy

  Brookings Papers on Economic Activity · 2016-01-01 · 46 citations

  articleOpen access1st authorCorresponding

  The $1.6 trillion that U.S. households borrowed in 2010 through government-backed direct loan and loan guarantee programs-most notably from Fannie Mae and Freddie Mac, the student loan programs, and the Federal Housing Administration, but also more than 100 smaller programsprovided credit subsidies and relaxed credit-rationing constraints that caused both borrowing and spending that year to be higher than they would otherwise have been. A simple theoretical model illustrates these channels. Esti…

  PublisherOA PDFDOI

• Valuation of Government Policies and Projects

  Annual Review of Financial Economics · 2012-08-20 · 44 citations

  articleOpen access1st authorCorresponding

  Governments play a central role in the allocation of capital and risk in the economy. Evaluating the cost to taxpayers of government investments requires an assumption about the government's cost of capital. Governments often take their borrowing rate to be their cost of capital, which implicitly treats the market risk associated with their activities as having no cost to taxpayers. This article reviews the theoretical and practical rationale for treating market risk as a cost to governments, pr…

  PublisherOA PDFDOI

• Rebutting Arrow and Lind: why governments should use market rates for discounting

  Journal of Natural Resources Policy Research · 2014-01-01 · 17 citations

  article1st authorCorresponding

  Research Article| January 01 2014 Rebutting Arrow and Lind: why governments should use market rates for discounting Deborah Lucas Deborah Lucas * Massachusetts Institute of Technology, Sloan School of Management, 100 Main St, E62-640, Cambridge, MA 02142, USA Search for other works by this author on: This Site Google Journal of Natural Resources Policy Research (2014) 6 (1): 85–91. https://doi.org/10.1080/19390459.2013.874106 Cite Icon Cite Share Icon Share Twitter Permissions Search Site Citati…

  PublisherDOI

Frequent coauthors

• Robert L. McDonald

  Kellogg's (Canada)

  47 shared

• J.B. Heaton

  24 shared

• Robert A. Korajczyk

  12 shared

• Damien Moore

  Moody's Corporation (United States)

  12 shared

• Narayana Kocherlakota

  University of Rochester

  5 shared

• Gee Hee Hong

  Federal Reserve Bank of Atlanta

  5 shared

• Marvin Phaup

  George Washington University

  5 shared

• Stephen P. Zeldes

  Columbia University

  5 shared

Awards & honors

• Member of the National Academy of Public Administration
• Member of the National Academy of Social Insurance
• Senior Fellow of the Asian Bureau of Financial and Economic…
• Fellow of the Econometric Society
• Elected member of the National Academy of Public Administrat…

Similar researchers at Massachusetts Institute of Technology

• Andrew W. Loh-92
• Robert C. Mertonh-71
• Jonathan A. Parkerh-47