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The Midway and Beyond: Recent Work on Economics at Chicago Douglas A
The Midway and Beyond: Recent Work on Economics at Chicago Douglas A. Irwin Since its founding in 1892, the University of Chicago has been home to some of the world’s leading economists.1 Many of its faculty members have been an intellectual force in the economics profession and some have played a prominent role in public policy debates over the past half-cen- tury.2 Because of their impact on the profession and inuence in policy Correspondence may be addressed to: Douglas Irwin, Department of Economics, Dartmouth College, Hanover, NH 03755; email: [email protected]. I am grateful to Dan Ham- mond, Steve Medema, David Mitch, Randy Kroszner, and Roy Weintraub for very helpful com- ments and advice; all errors, interpretations, and misinterpretations are solely my own. Disclo- sure: I was on the faculty of the then Graduate School of Business at the University of Chicago in the 1990s and a visiting professor at the Booth School of Business in the fall of 2017. 1. To take a crude measure, nearly a dozen economists who spent most of their career at Chicago have won the Nobel Prize, or, more accurately, the Sveriges Riksbank Prize in Eco- nomic Sciences in Memory of Alfred Nobel. The list includes Milton Friedman (1976), Theo- dore W. Schultz (1979), George J. Stigler (1982), Merton H. Miller (1990), Ronald H. Coase (1991), Gary S. Becker (1992), Robert W. Fogel (1993), Robert E. Lucas, Jr. (1995), James J. Heckman (2000), Eugene F. Fama and Lars Peter Hansen (2013), and Richard H. Thaler (2017). This list excludes Friedrich Hayek, who did his prize work at the London School of Economics and only spent a dozen years at Chicago. -
1 CHICAGO and INSTITUTIONAL ECONOMICS1 Malcolm Rutherford
CHICAGO AND INSTITUTIONAL ECONOMICS1 Malcolm Rutherford University of Victoria 1. Introduction For most economists the terms “Chicago economics” and “institutionalism” denote clearly antithetical approaches to the discipline. Various members of the modern “Chicago School” have made highly dismissive remarks concerning American institutionalism. Coase has commented that American institutionalists were anti-theoretical, and that “without a theory they had nothing to pass on except a mass of descriptive material waiting for a theory, or a fire” (Coase 1984, p. 230). Some of these attitudes have their roots in the interwar period, most obviously in Frank Knight’s bitingly critical attacks on the methodology and policy positions of institutionalist and advocates of the “social control” of business (Knight 1932). Nevertheless, what this presentation seeks to reveal is a much more complex interrelation between institutional and Chicago economics. To fully understand this relationship it is necessary to begin with the early years of the Chicago Department of Economics. 2. Chicago Economics and Institutionalism 1892-1919 The Chicago Department of Political Economy was begun in 1892 with Laurence Laughlin as its head. While Laughlin was extremely conservative in his economic and political views, and very much at odds with the historicist or “new” school influence in American economics, he built a department that was extremely diverse in its interests and had significant representation of those critical of “orthodox” economics (Nef 1934). Most obviously, Laughlin brought Thorstein Veblen with him from Cornell, and shortly thereafter placed him in charge of editing the Journal of Political Economy. As Hodgson has argued (Hodgson 2004), Veblen’s years at Chicago (from 1892 to 1906) were remarkably creative ones. -
Political Economy 1957-1982
The Thomas JeffersonCenter Foundation Political Economy 1957-1982 James J\i Buchanan The C. Warren Nutter Lectures in PoliticalEconomy The C. Warren Nutter Lectures in Political Economy The G. Warren Nutter Lectures in Political Economy have been in stituted to honor the memory of the late Professor Nutter, to en courage scholarly interest in the range of topics to which he devoted his career, and to provide his students and associates an additional contact with each other and with the rising generation of scholars. At the time of his death in January 1979, G. Warren Nutter was director of the Thomas Jefferson Center Foundation, adjunct scholar of the American Enterprise Institute, director of AEI's James Madison Center, a member of advisory groups at both the Hoover Institution and The Citadel, and Paul Goodloe Mcintire Professor of Economics at the University of Virginia. Professor Nutter made notable contributions to price theory, the assessment of monopoly and competition, the study of the Soviet economy, and the economics of defense and foreign policy. He earned his Ph.D. degree at the University of Chicago. In 1957 he joined with James M. Buchanan to establish the Thomas Jefferson Center for Studies in Political Economy at the University of Virginia. In 1967 he established the Thomas Jefferson Center Foundation as a separate entity but with similar objectives of supporting scholarly work and graduate study in political economy and holding conferences of econ omists from the United States and both Western and Eastern Europe. He served during the 1960s as director of the Thomas Jefferson Center and chairman of the Department of Economics at the University of Virginia and, from 1969 to 1973, as assistant secretary of defense for international security affairs. -
Pénz És Kamat a Monetáris Politika Megújítása PROSPERITAS
Ábel István PÉNZ ÉS KAMAT A monetáris politika megújítása PROSPERITAS Monográfiák A sorozatban megjelent kötetek listája a könyv végén található Ábel István PÉNZ ÉS KAMat A monetáris politika megújítása A hagyományos közgazdaságtan a reálelemzés keretében érvel, és ez aka dálya a valós gazdasági folyamatok megértésének. Schumpeter és Keynes kritizálta ezt a megközelítést, és helyette a monetáris elemzést alkalmazta. Ezt az elméleti alapvetést követem, amikor megkérdőjelezem a kamat politika hagyományos felfogását. A könyvben a pénz és a kamat egy új elméletét ismertetve megmutatom, hogy a kamat természetes rátájának klasszikus fogalma nem ad támpontot a monetáris politika számára. Az endogén pénzelmélet jut el ahhoz a felismeréshez, hogy a pénzterem tésben a kereskedelmi bankok hitelezése a döntő jelentőségű, és ezzel a jegybank szerepe háttérbe szorul ezen a téren. A pénzteremtés irányítását a központi bank napjainkban már nem kizárólag a kamatpolitika alakí tásával gyakorolja, hanem a hitelezésnek a bankok pénzügyi stabilitási és likviditási szabályozásán keresztül valósítja meg. A jegybank ugyanakkor a reálkamathoz fűződő téves hiedelmektől megszabadítva meghatározó szerepet játszik a kamatok alakításában. A könyv az MTA–BGE Makrogazdasági fenntarthatósági kutatócsoport keretében az MTA Támogatott Kutatócsoportok Irodájának, valamint az Emberi Erőforrások Minisztériuma Felsőoktatási Intézményi Kiválósági Programja és a Budapesti Gazdasági Egyetem között létrejött együttműködési megállapodás (17833/2018/FEKUTSTRAT) támogatásával -
Chicago Monetary Traditions
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Laidler, David Working Paper Chicago monetary traditions Research Report, No. 2003-3 Provided in Cooperation with: Department of Economics, University of Western Ontario Suggested Citation: Laidler, David (2003) : Chicago monetary traditions, Research Report, No. 2003-3, The University of Western Ontario, Department of Economics, London (Ontario) This Version is available at: http://hdl.handle.net/10419/70428 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Chicago Monetary Traditions by David Laidler (Bank of Montreal Professor) Abstract: This paper, prepared for the forthcoming Elgar Companion to the Chicago School of Economics (Ross Emmett and Malcolm Rutherford eds.) describes monetary economics as it existed in four eras at the University of Chicago. -
Zbwleibniz-Informationszentrum
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Harberger, Arnold C.; Edwards, Sebastian Working Paper The Department of Economics at the University of Chicago, 1947-1982 Serie Documentos de Trabajo, No. 788 Provided in Cooperation with: University of CEMA, Buenos Aires Suggested Citation: Harberger, Arnold C.; Edwards, Sebastian (2021) : The Department of Economics at the University of Chicago, 1947-1982, Serie Documentos de Trabajo, No. 788, Universidad del Centro de Estudios Macroeconómicos de Argentina (UCEMA), Buenos Aires This Version is available at: http://hdl.handle.net/10419/238413 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu UNIVERSIDAD DEL CEMA Buenos Aires Argentina Serie DOCUMENTOS DE TRABAJO Área: Economía THE DEPARTMENT OF ECONOMICS AT THE UNIVERSITY OF CHICAGO, 1947–1982 Arnold C. -
The Initiated”: Aaron Director and the Chicago Monetary
“THE INITIATED”: AARON DIRECTOR AND THE CHICAGO MONETARY TRADITION BY GEORGE S. TAVLAS* Abstract Aaron Director taught at the University of Chicago from 1930 to 1934 and from 1946 to 1967. Both periods corresponded to crucial stages in the development of Chicago monetary economics under the leaderships of Henry Simons and Milton Friedman, respectively. Any impact that Director may have played in the development of those stages and to the relationship between the views of Simons and Friedman has been frustrated by Director’s lack of publications. I provide evidence, much of it for the first time, showing the important role played by Director in the development of Chicago monetary economics, including his role as a transmitor of Simons’s ideas to Friedman. * Bank of Greece and the Hoover Institution, Stanford University Email address: [email protected] This “preprint” is the peer-reviewed and accepted typescript of an article that is forthcoming in revised form, after minor editorial changes, in the Journal of the History of Economic Thought (ISSN: 1053-8372), issue TBA. Copyright to the journal’s articles is held by the History of Economics Society (HES), whose exclusive licensee and publisher for the journal is Cambridge University Press. (https://www.cambridge.org/core/journals/journal-of-the-history-of-economic- thought) This preprint may be used only for private research and study and is not to be distributed further. The preprint may be cited as follows: Tavlas, George S. “The Initiated”: Aaron Director and the Chicago Monetary Tradition. Journal of the History of Economic Thought (forthcoming). Preprint at SocArXiv, osf.io/preprints/socarxiv I. -
The Elgar Companion to the Chicago School of Economics
The Elgar Companion to the Chicago School of Economics Edited by Ross B. Emmett James Madison College, Michigan State University, USA Edward Elgar Cheltenham, UK • Northampton, MA, USA © Ross B. Emmett 2010 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher. Published by Edward Elgar Publishing Limited The Lypiatts 15 Lansdown Road Cheltenham Glos GL50 2JA UK Edward Elgar Publishing, Inc. William Pratt House 9 Dewey Court Northampton Massachusetts 01060 USA A catalogue record for this book is available from the British Library Library of Congress Control Number: 2009941413 ISBN 978 1 84064 874 4 (cased) Printed and bound by MPG Books Group, UK 02 Contents List of contributors vii Preface xi Introduction 1 Ross B. Emmett PART I ESSAYS ON THE CHICAGO SCHOOL 1 The development of post- war Chicago price theory 7 J. Daniel Hammond 2 Chicago economics and institutionalism 25 Malcolm Rutherford 3 Adam Smith and the Chicago School 40 Steven G. Medema 4 The Economic Organization, by Frank H. Knight: a reader’s guide 52 Ross B. Emmett 5 The Chicago School of welfare economics 59 H. Spencer Banzhaf 6 Chicago monetary traditions 70 David Laidler 7 On the origins of A Monetary History 81 Hugh Rockoff 8 Chicago and economic history 114 David Mitch 9 Chicago and the development of twentieth- century labor economics 128 Bruce E. Kaufman 10 Human Capital, by Gary S. Becker: a reading guide 152 Pedro Nuno Teixeira 11 Chicago law and economics 160 Steven G. -
Mark Blaug on the Quantity Theory: a Skirmish on the Border Between Science and Ideology in the History of Economic Thought*
Mark Blaug on the Quantity Theory: A Skirmish on the Border between Science and Ideology in the History of Economic Thought* by David Laidler Mark Blaug brought his usual standards of historical awareness and respect for empirical content to bear when he wrote about the Quantity Theory of Money, but he hesitated to probe too deeply into the political and ideological elements of its history, perhaps leading him to underestimate their importance for the theory's evolution. JEL classification: B1, B2, B31 Keywords: money, Quantity theory, value theory, positive economics. empiricism, formalism, bimetallism, gold standard, monetarism. *I am grateful to Marcel Boumans, Richard Lipsey, Roger Sandilands and an anonymous referee for many useful comments on earlier versions of this paper, and suggestions for its revision. Much as I would like to blame them for any remaining shortcomings, I accept sole and full responsibility for them. 1 My Encounters with Mark I first met Mark Blaug in the early 1960s in the UK, though I'm not sure exactly when or where. No matter: at that time, Mark was already a well established scholar of whose work I had been aware even as an undergraduate. He was thus something of an authority figure in my intellectual landscape, and also, as I look back, he became an example as well, though I can't claim to have been immediately conscious of this. Mark was passionate about the history of economics, not as a separate field of study, but as an integral part of the discipline. So am I, at least as far as monetary economics is concerned. -
The Monetarist Policy Debate: an Informal Retrospective
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Mayer, Thomas Working Paper The monetarist policy debate: an informal retrospective Working Paper, No. 03-9 Provided in Cooperation with: University of California Davis, Department of Economics Suggested Citation: Mayer, Thomas (2003) : The monetarist policy debate: an informal retrospective, Working Paper, No. 03-9, University of California, Department of Economics, Davis, CA This Version is available at: http://hdl.handle.net/10419/23207 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu THE MONETARIST POLICY DEBATE: AN INFORMAL RETROSPECTIVE Thomas Mayer* This essay offers a critical sketch of the Keynesian-monetarist debate about monetary policy that took place in the United States in the second half of the 20th. -
La Escuela De Chicago En Argentina
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Carlos de Pablo, Juan Working Paper La escuela de Chicago en Argentina Serie Documentos de Trabajo, No. 460 Provided in Cooperation with: University of CEMA, Buenos Aires Suggested Citation: Carlos de Pablo, Juan (2011) : La escuela de Chicago en Argentina, Serie Documentos de Trabajo, No. 460, Universidad del Centro de Estudios Macroeconómicos de Argentina (UCEMA), Buenos Aires This Version is available at: http://hdl.handle.net/10419/84384 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu UNIVERSIDAD DEL CEMA Buenos Aires Argentina Serie DOCUMENTOS DE TRABAJO Área: Economía LA ESCUELA DE CHICAGO EN ARGENTINA Juan Carlos de Pablo Agosto 2011 Nro. -
A Reconsideration of the Doctrinal Foundations of Monetary-Policy Rules: Fisher Versus Chicago George S
A Reconsideration of the Doctrinal Foundations of Monetary-Policy Rules: Fisher versus Chicago George S. Tavlas* Bank of Greece and the Hoover Institution, Stanford University Economics Working Paper 20103 HOOVER INSTITUTION 434 GALVEZ MALL STANFORD UNIVERSITY STANFORD, CA 94305-6010 May 2020 There has long been a presumption that the price-level-stabilization frameworks of Irving Fisher and Chicagoans Henry Simons and Lloyd Mints were essentially equivalent. I show that there were subtle, but important, differences in the rationales underlying the policies of Fisher and the Chicagoans. Fisher’s framework involved substantial discretion in the setting of the policy instruments; for the Chicagoans the objective of a policy rule was to tie the hands of the authorities in order to reduce discretion and, thus, monetary-policy uncertainty. In contrast to Fisher, the Chicagoans provided assessments of the workings of alternative rules, assessed various criteria -- including simplicity and reduction of political pressures -- in the specification of rules, and concluded that rules would provide superior performance compared with discretion. Each of these characteristics provided a direct link to the rules-based framework of Milton Friedman. Like Friedman’s framework, Simons’s preferred rule targeted a policy instrument. Keywords: Monetary policy rules, Irving Fisher, Henry Simons, Lloyd Mints, Milton Friedman, Taylor rule JEL Codes: B22, B31, E52 The Hoover Institution Economics Working Paper Series allows authors to distribute research for discussion and comment among other researchers. Working papers reflect the views of the authors and not the views of the Hoover Institution. * Correspondence may be addressed to George Tavlas, Bank of Greece, 21 E Venizelos Ave, Athens, 10250, Greece, Tel.