Chicago school of monetary economics

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The Chicago school of monetary economics refers to a school of thought originated by a group of neo-classical economists who believed that real-world market economies produce roughly efficient ("Pareto optimal") outcomes that cannot be improved upon by public policy. It is the belief in free market economics rather than any state intervention in the economy. The originators and proponents of this school of thought were largely faculty members of the University of Chicago. Leading Chicago School economists include Milton Friedman and George Stigler.

It is in contrast with the MIT School, which argues that real-world economies are afflicted by pervasive market failures, imperfect competition and monopoly, and are affected by such problems as pollution and short supplies of public goods such as street lighting or national defense. The MIT School endorses policy intervention to address market failures (a Keynesian approach to economics).[1]

References

  1. Breaking the Neoclassical Monopoly in Economics. Project Syndicate.