This article deals with the history and main protagonists of the Chicago School from c. 1930 to 1985. The two main beliefs of members of the School are (a) that neoclassical price theory can explain observed economic behaviour, and (b) that free markets efficiently allocate resources and distribute income, implying a minimal role for the state in economic activity. Chicagoans maintain that no opportunity for arbitrage gains goes unexploited, and subscribe to the efficient markets hypothesis. Their ‘disciplinary imperialism’ leads them frequently to challenge conventional wisdom by applying price theory to seemingly non-economic topics.
KeywordsAggregate demand Arbitrage Axiomatic theories Becker, G. Buchanan, J. Capital asset pricing model Capital theory Chicago school Clark, J. Coase theorem Coase, R. Competition Cost of time Cowles Commission Deregulation Director, A. Dividends Douglas, P. Education Efficient markets hypothesis Egalitarianism Family, economic analysis of Finance Free markets Friedman, M. Friedman, R. General equilibrium theory Hardy, C. History of economic thought Human capital Imperfect competition Income distribution Industrial organization Institutionalism International trade Keynesianism Knight, F. Laissez faire Lange, O. Laughlin, J. Law, economic analysis of Leland, S. Lerner, A. Lewis, H. Lucas, R. Market prices Market socialism Marschak, J. Mathematical economics Metzler, L. Miller, M. Millis, H. Mitchell, W. Modigliani, F. Monetarism Monetary theory Money supply Monopolistic competition Muth, J. Natural monopolies Nef, J. Neoclassical monetary theory Neoclassical price theory New Deal Pareto optimality Political economy Political economy of policy reform Political markets Positive economics Posner, R. Price theory Progressive and regressive taxation Public ownership Quantitative techniques Racial discrimination Rational expectations Reder, M. W. Regulation Reserve/deposit ratio Resource allocation Risk Schultz, H. Schultz, T. Simons, H. Social costs Statistical demand curves Statistics and economics Stigler, G. Stock prices Testing Trade unions Transaction costs Uncertainty Veblen, T. Viner, J. Wallis, W. Wright, C.
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