Becker Friedman Institute established at University of Chicago

Two major economic research centers at the University of Chicago have joined to create the Gary Becker Milton Friedman Institute for Research in Economics, an intellectual destination for scholars across a variety of disciplines.

The Becker Friedman Institute brings together the Milton Friedman Institute for Research in Economics and the Becker Center on Chicago Price Theory Founded by Richard O. Ryan, MBA ’66. Supported by the faculties of the University’s Economics Department, the University of Chicago Booth School of Business and the Law School, the Becker Friedman Institute will continue to support scholarship and attract outstanding visiting scholars of all levels to the University.

The Institute is named for two Nobel laureates in Economic Sciences, Gary Becker and his mentor, the late Milton Friedman — Chicago iconoclasts who became icons in the field. While they pursued very different paths, Becker and Friedman shared a fundamental belief that economics, grounded in rigorous, empirical research, is a powerful tool to understand human behavior.

Becker, University Professor in Economics, will serve as Chairman of the new Institute, and Lars Peter Hansen, the David Rockefeller Distinguished Service Professor in Economics and Statistics and the founding director of the Friedman Institute, will serve as Research Director. Steven Levitt, the William B. Ogden Distinguished Service Professor in Economics, will continue to be very much involved in the new Institute, including overseeing research programs that began under his leadership of the Becker Center.

The Institute’s activities grew out of the work of an extraordinary roster of influential thinkers who developed the two founding entities. In addition to those mentioned above, key contributors include Nobel laureates James Heckman, the Henry Schultz Distinguished Service Professor in Economics and in the College and the Harris School of Public Policy Studies, and Robert Lucas Jr., the John Dewey Distinguished Service Professor in Economics and the College; Chicago Booth’s John Cochrane, the AQR Capital Management Professor of Finance, and Kevin Murphy, the George J. Stigler Distinguished Service Professor of Economics; and Eric Posner, the Kirkland & Ellis Professor in the Law School.

The Becker Friedman Institute will appoint highly accomplished scholars to serve as Distinguished Fellows who will visit the University for extended periods and play leadership roles in research initiatives. Three Distinguished Fellows have been named for the next academic year — Pierre André Chiappori of Columbia University, Edward Lazear of Stanford University and Thomas Sargent of New York University. Lazear also will lead an external Board of Overseers advising the Institute.

The Institute will eventually share space with the Economics Department at 5757 S. University Ave., near the historic heart of the University’s campus and Chicago Booth.

The Becker Center for Price Theory has focused on outreach to young scholars with programs that introduce MBA and PhD students to the fundamental role of markets and incentives in understanding economic behavior, and has supported young scholars at Chicago. The Milton Friedman Institute has become a focal point for researchers, hosting visiting fellows and organizing conferences to share and enhance new research and creating opportunities for fruitful collaborations across disciplines. As a single comprehensive entity, the Becker Friedman Institute will continue the leading work of both programs.

"The Institute brings together scholars from around the world in an environment of rigorous exploration and discovery," said Provost Thomas F. Rosenbaum, the John T. Wilson Distinguished Service Professor in Physics. "It is created in the dynamic tradition of the Chicago workshop, where ideas flow, collide and take new shape."

Becker said the Institute would support promising young faculty and provide advanced professional training for outstanding postdoctoral fellows. “The new institute moves beyond traditional boundaries, such as the gulf between microeconomics and macroeconomics, and promotes research that crosses disciplines,” Becker said. “The essence is a focus on the power of economic thinking to explain important aspects of behavior in the real world, as demonstrated over the decades by many Chicago economists.”

The Becker Friedman Institute will support inquiry on price theory and on the interaction of economics, public policy and the law, historical strengths at Chicago. Other durable and collaborative research initiatives will address some of today’s most pressing issues: systemic risks in the global economy, long-term fiscal imbalances, economics and the family, investment in human capital and other topics.

“Since its inception in 2008, the Friedman Institute has focused on activities that examine a wide range of topics through an academic lens. Going forward, the Becker Friedman Institute also will seek to engage the public more,” said Hansen. “We have an exciting opportunity to connect the two, with activities that bring forth the best research in ways that spark public conversation and inform policy debates.”

More information about the Institute can be found at http://bfi.uchicago.edu.

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Profs. Gary S. Becker and Lars Hansen discuss the new Becker Friedman Institute for Research in Economics.

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