The University of Chicago is establishing a center for path-breaking research in economics to build upon the strengths of economists throughout the University and to honor the contributions of Milton Friedman, considered by many to be the leading economist of the 20th century.
The University’s investment in the Institute will be about $200 million, with half of that amount establishing an operating endowment and the remainder allocated for facilities and other start-up costs. The majority of the funds will be raised in donations from alumni and business leaders around the world.
“The goal of the Institute is to build on the University’s existing leadership position and make the Milton Friedman Institute a primary intellectual destination for economics by creating a robust forum for engagement of our faculty and students with scholars and policymakers from around the world,” said President Robert J. Zimmer. “The Milton Friedman Institute will continue Chicago’s extraordinary tradition of creating new ideas that stimulate the academic world and innovative approaches that influence policy.”
“The Institute will begin ramping up in Fall 2008, with University resources supporting an initial visitors’ program. In addition, we will immediately launch the search for the director,” Zimmer said.
The Milton Friedman Institute will occupy buildings that currently house the Chicago Theological Seminary, which the University is purchasing to enable the Institute to be centrally located between the University’s main quadrangles and the Harper Center of the Graduate School of Business. The Seminary’s main building (5757 S. University) will be renovated to respect its architectural and historic significance, as well as to create a home appropriate for the Institute and possibly the Department of Economics. As part of the purchase agreement, the University will construct a new home for the Seminary. Though there are no immediate plans to relocate the Seminary Co-op Bookstore, its owners have expressed an interest in exploring new options.
Faculty from the University’s Department of Economics will be joined at the Friedman Institute by international scholars, who will conduct research in topics related to economics, business and law. Faculty from the Graduate School of Business and the Law School also will play an active role in the Institute. The Institute will be led by a director and faculty advisory group.
Building on Tradition
The Institute will build on a tradition of strong research in economics, an approach to scholarship that has become known as the Chicago School of Economics. That tradition has created a research environment that has led to Nobel prizes in economics for 25 faculty, researchers and alumni.
“The Institute will build on this important tradition by focusing on research questions that support development of economic models grounded in economic theory and empirical evidence and designed to evaluate a variety of questions related to economic policy,” said Nobelist Gary Becker, a member of the faculty committee that developed a recommendation for the Institute. Becker is University Professor in Economics and the Graduate School of Business.
“We see the Friedman Institute as a means to encourage interaction across some of the best and most exciting areas of research in economics and related disciplines,” said Lars Hansen, chairman of the faculty committee, and the Homer J. Livingston Distinguished Service Professor in Economics. “It will give us a way to continue to learn about the best new research in a variety of areas and to seek cross-fertilization among important subfields of economics.”
The Institute hopes visiting faculty to Chicago will play an important role in developing new ideas, Hansen said. The Institute also plans to develop a program for outstanding young scholars, who will come as post-doctoral fellows.
The Institute “will help us break down intellectual barriers by giving experts the support required to run workshops during extended visits and to recruit complementary younger visitors. Thematic workshops over extended periods of time will allow us and our colleagues to explore potential synergies through repeated dialog and exposure to promising lines of research,” he said.
Joining Becker and Hansen on the committee are Nobelists James Heckman, the Henry Schultz Distinguished Service Professor in Economics, and Robert Lucas Jr., the John Dewey Distinguished Service Professor in Economics. Other committee members include John Cochrane, the Myron S. Scholes Professor of Finance in the Graduate School of Business; Kevin Murphy, the George J. Stigler Distinguished Service Professor in Economics in the Graduate School of Business; and Eric Posner, the Kirkland & Ellis Professor in the Law School.
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.”
“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 Graduate School of Business 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 A. Snyder, Dean of the Graduate School of Business and George Pratt Shultz Professor of Economics.
Milton Friedman Society
An initial set of donors at the $1 million and $2 million level will be invited to become members of the Milton Friedman Society. Members of the Society will take part in the Institute’s activities, which will include workshops, seminars and lectures that will focus on fundamental questions in economics, business and law as well as related disciplines such as medicine and public policy.
Friedman, who died in 2006, was a longtime University faculty member who was known for his intellectual fearlessness. His work was frequently criticized, particularly during the early part of his career, but he persisted and was able to convince other economists and policymakers of the merits of his position.
The Institute will build upon that spirit of fearless scholarship as it encourages the best new work in economics, Becker said. “This connection of the Institute to the legacy of Milton Friedman’s intellectual contributions provides a special opportunity to recognize the distinguished place held by Friedman at Chicago and throughout the world.”