Economics in Chicago and the New Chicago School

The chapter deals with the New Chicago School in Chicago, around a group of economists like George Stigler, Milton Friedman, Ronald Coase and Gary Becker, without forgetting the role of Friedrich Hayek in the development of its neoliberalist ideology, and outside Chicago, in the universities of the “Chicago connection”: University of California, Los Angeles, and the Virginia Universities, with many economists, the figure of greater relevance being James Buchanan. Firstly the chapter examines the contributions of the Chicago’s economists: Stigler’s studies of industrial structures, functioning of markets and causes and effects of public regulation; Friedman’s contributions in macroeconomics that contributed to undermine the postwar Keynesian consensus; Coase’s neo-institutionalist contribution; Becker’s studies which applied the principle of optimizing behavior to areas traditionally not belonging to the domain of economics. Then the chapter analyzes the contributions of economists outside Chicago who extended the Chicago perspective: in particular Buchanan’s Public Choice research program is examined.