Deborah Lucas, Finance
Finance Professor Deborah
Lucas is helping Congress figure its bills
days, when Kellogg Professor Deborah Lucas ponders issues
in finance, the questions are no longer academic.
her answers to inquiries such as How much will it cost
to reform Social Security? and Should the government
subsidize prescription drugs? will help shape the way
these very issues will be handled in the future.
the Donald C. Clark/Household International Distinguished
Professor of Finance, has been on leave from Kellogg the past
two years to work as chief economist for the Congressional
Budget Office in Washington, D.C.
is the chief number-cruncher for the nations lawmakers.
When new legislation is proposed and officials ask How
much will it cost? Lucas and her colleagues are the
ones charged with figuring the bill.
is a great agency to work at because the emphasis is on providing
unbiased facts about program costs that are essential for
rational decision-making, says Lucas, who will return
to Kellogg in the spring to teach but will also continue to
work in the CBO.
helps to oversee much of the agencys research agenda,
which is undertaken by the approximately 80 economists on
the staff. She is also involved in a number of special studies.
them is an investigation into the extent to which Freddie
Mac and Fannie Mae are subsidized by taxpayers. Lucas found
that the government-chartered firms benefit by $10.6 billion
a year, $3.9 billion of which is retained by the companies
for themselves and their shareholders. The agencies, which
help provide money for home mortgages, disputed the results
of the study. It was an interesting and controversial
calculation, Lucas says.
a return trip to Washington for Lucas, who has long had an
interest in public policy. From 1992 to 1993, she worked for
the Council of Economic Advisers, covering macroeconomics
and finance for the Clinton administration. Among the high-profile
issues she addressed was the administrations controversial
proposal for health-care reform.
around, Lucas is continuing to work on social issues. One
of her top priorities is to further the development of a large-scale
model that views the challenges of an aging population in
a more holistic way than government agencies have
done in the past. This model will take into account Social
Security, Medicare and other programs for the elderly, and
analyze their impact on the nations economy.
is among many professors across the country who take periodic
breaks from academia to work in the public
She finds her skills are in great demand in Washington. People
really care about the answers you are providing, she
says. Its very satisfying because they really
want to know what it will cost, say, to privatize Amtrak.
Lucas looks forward to returning to Kellogg, where she focuses
her teaching on fixed income securities and turbo
finance, and her research on dynamic asset-pricing models.
with the government actually gives you a renewed appreciation
for the types of skills you learn at Kellogg, she says.
It makes me feel like what I teach is essential.