The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

CHICAGO SCHOOL OF ECONOMICS Definition & Legal Meaning

Definition & Citations:

One of the most influential bodies of economic thought in recent times. Major ideological defender of conservative economics and capitalism. This monetarist school is associated with the economics department at the University of Chicago. This association was a spark, especially during the 1970s and particularly starting with professor (1948-79) Milton Friedman (1912-2006) who won the 1976 Nobel Prize in economics for his theory of natural rate of unemployment. Many colleagues went on to win seven more Nobels. These Nobel winners include: [] George Stigler (1911-91) in 1982 for deregulation theory, [] Merton Miller (1923) in 1990 for financial economics, [] Ronald Coase (1910) in 1991 for Coase’s theorem, [] Gary Becker (1930) in 1992 for application of microeconomics to nonmarket behavior, and [] Robert Lucas (1937) in 1995 for the theory of rational expectations. The basic tenets for the theory of rational expectations are that … (1) markets allocate resources more efficiently than any government, (2) monopolies are created by government’s attempt to regulate an economy (3) governments should avoid trying to manage aggregate demand and, instead, (4) should focus on maintaining a steady and low rate of growth of money supply. This theory relies extraordinarily on mathematical models that seemingly can prove anything they want to. This is a detriment held by its critics. Also, some of its assertions, such as criminal activity being a career choice, result as seemingly absurdities, and that smoking being an example of making an informed choice – between cancer risk and immediate gratification is another assertion taken as absurd. Refer to monetarism.


This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.