Chicago school of economics

"Chicago is not a place, it is a state of mind." - Paul Samuelson, American neoclassical economist

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The Chicago school of economics is a school of thought favouring free-market economics practiced at and disseminated from the University of Chicago in the middle of the 20th century. Its most well known members leaders were recipients of the Nobel prize for economics including George Stigler and Milton Friedman.

It is associated with neoclassical price theory and free market libertarianism, the refutation and rejection of Keynesianism in favor of monetarism (until the 1980s, when it the theory was quickly shown to be mistaken), and the rejection of regulation of business in favor of laissez-faire.

The term was coined in the 1950s to refer to economists teaching in the Economics Department at the University of Chicago, and closely related academic areas at the University such as the Graduate School of Business and the Law School. They met together in frequent intense discussions that helped set a group outlook on economic issues, based on price theory. The 1950s saw the height of popularity of the Keynesian school of economics, so the members of the University of Chicago were considered outcast. Leading neoliberal theorist the Austrian economist Friedrich Hayek (founder of the Mont Pelerin Society) was teaching there because that is the only place he could find employment at the time.

People

• Gary Becker | Frank Knight | Henry Simon | Milton Friedman | George Stigler | Albert Rees | H. Gregg Lewis

Reading and Resources

Reading

• Alan O. Ebenstein Friedrich Hayek: A Biography.   Palgrave . ISBN 0312233442.
• Emmett, Ross B. (2008). "Chicago School (new perspectives)," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
• Two Lucky People: Memoirs.  University of Chicago Press . ISBN 0226264149.
• Making Chicago Price Theory: Friedman-Stigler Correspondence, 1945–1957.  Routledge . ISBN 0415700787.
• Herbert Hovenkamp Antitrust Policy after Chicago.   Michigan Law Review, Vol. 84, No. 2. pp. 213–284
• The Revival of Laissez-Faire in American Macroeconomic Theory: A Case Study of Its Pioneers.  Edward Elgar . ISBN 1840646063.
• On the 'Chicago School of Economics'. . pp. 64–69
• Economics As Religion: From Samuelson to Chicago and Beyond.  Pennsylvania State Univ. Press . ISBN 0271020954.
• Melvin W. Reder Chicago Economics: Permanence and Change.  . pp. 1–38 Reprinted in John Cunningham Wood & R.N. Woods (1990), Milton Friedman: Critical Assessments, pp. 343-393.
• Warren J. Samuels (Ed.) The Chicago School of Political Economy East Lansing, Michigan: Association for Evolutionary Economics, 1976.
• Mark Skousen Vienna and Chicago: Friends or Foes? A Tale of Two Schools of Free-Market Economics. Washington DC: Capital Press, 2005. 306 pgs.
• Chicago Studies in Political Economy.  University of Chicago Press . ISBN 0226774376.
• Memoirs of an Unregulated Economist.  Basic Books . ISBN 0465044433. Description & preview.
• Valdes, Juan Gabriel (2008): Pinochet's Economists: The Chicago School of Economics in Chile (Historical Perspectives on Modern Economics), Cambridge University Press, ISBN 0521064406
• Frontiers of Economics: Nobel Laureates of the Twentieth Century.  Greenwood Press . ISBN 031332073X.

Resources

• Edward Herman The Chicago School excerpt from The Politicized "Science"' in Edward S. Herman Triumph of the Market: Essays on Economics, Politics and the Media, Boston: South End Press, 1995, p. 34-37. Reproduced by permission of the author.
• Milton Friedman by Edward S. Herman
• George Stigler by Edward S. Herman

See Also

• Austrian School of Economics | Public Choice theory