Scholars convened to create concept for institute on economics, society

A group of distinguished scholars from the Department of Economics, the Graduate School of Business and the Law School undertook, over the last year, the important charge of envisioning a major new institute at the University on economics and society. Appointed in May 2007 by President Zimmer and Provost Thomas Rosenbaum, this special faculty committee proposed the new Milton Friedman Institute.

The University announced Thursday, May 15 the launch of the institute, which was the collective vision of Lars Hansen, the Homer J. Livingston Distinguished Service Professor in Economics and committee chair; Gary Becker, the University Professor in Economics and the Graduate School of Business, James Heckman, the Henry Schultz Distinguished Service Professor in Economics, and Robert Lucas Jr., the John Dewey Distinguished Service Professor in Economics, all Nobel laureates; John Cochrane, the Myron S. Scholes Professor of Finance in the GSB; Kevin Murphy, the George J. Stigler Distinguished Service Professor in Economics in the GSB; and Eric Posner, the Kirkland & Ellis Professor in the Law School.

In their report, “A Proposal to Establish the Milton Friedman Institute,” the committee members proposed “to create an institute that features economic research at its best: rigorous development of economic models supported by empirical evidence and designed to address questions with important social and economic consequences.”

J. Mark Hansen, Dean of the Division of Social Sciences, said, “Powerful ideas like Friedman’s emerge from a challenging intellectual environment. Those ideas fundamentally reshaped societies around the globe in the 20th century. We expect that the new ideas that emerge from the Friedman Institute will have the same impact in this century.”

The committee noted that a University-supported structure for collaborative, economic research, such as the Milton Friedman Institute, would strengthen the important intellectual links that already have been developed over decades between the Department of Economics, the GSB and the Law School.

“By supporting the economics enterprise throughout the University and by raising the visibility of the research done by faculty in the Department of Economics, the GSB and the Law School, the Milton Friedman Institute will complement our efforts to build the best faculty in the world, strengthen our student ranks, and contribute to preparing individuals to lead enterprises in all sectors and thereby strengthen market-oriented economies throughout the world,” said Edward Snyder, Dean of the Graduate School of Business and the George Pratt Shultz Professor of Economics.

In Friedman’s words, the University’s impact on world economies has been far-reaching for one reason: “The most important aspect, in my opinion, is the scientific. The key to the influence of the University of Chicago on economics throughout the world is that ever since its founding in 1892, the Economics Department of the University of Chicago has regarded economics as a serious subject that has something to do with the real world. It has considered economics a positive science, a method of analysis which has broad applications to many topics.”

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