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Chicago Economics in the Making, 1926-1940. A Further Look at US Interwar Pluralism

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  • Luca Fiorito

    ()

  • Sebastiano Nerozzi

    ()

Abstract

The aim of this paper is to unfold a rich body of archival material that can shed new light on the nature and evolution of interwar Chicago economics. Specifically, this paper is based on a scrutiny of the PhD qualifying exams on Economic Theory at Chicago from 1926 to 1940. The qualifying tests (supplemented by the courses’ programs) show the existence of two important turning points in the shaping of Chicago economic training. The first one is in 1927, when John M. Clark, the undisputed leader of the Chicago Department of Economics during the heyday of institutionalism, moved to Columbia, leaving open ground to the restructuring of the courses according to a different and more analytical approach already represented in the Department by Viner and, in a narrower field, by Paul Douglas. The arrival at Chicago of figures such as Knight, Schultz and Simons definitely shifted the balance toward neoclassical theory. A second turning point occurred in 1933 when the qualifying test in Economic Theory was divided into two major fields: price and distribution theory on the one side; money and business cycle on the other. This innovation reveals the importance acquired by monetary theory in economic training at a time that is commonly associated with the nurturing of what was later named as the “Chicago monetary tradition.”

Suggested Citation

  • Luca Fiorito & Sebastiano Nerozzi, 2016. "Chicago Economics in the Making, 1926-1940. A Further Look at US Interwar Pluralism," Department of Economics University of Siena 733, Department of Economics, University of Siena.
  • Handle: RePEc:usi:wpaper:733
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    File URL: http://repec.deps.unisi.it/quaderni/733.pdf
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    References listed on IDEAS

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    1. Pier Francesco Asso & Luca Fiorito, 2008. "Was Frank Knight an Institutionalist?," Review of Political Economy, Taylor & Francis Journals, vol. 20(1), pages 59-77.
    2. Reder, Melvin W, 1982. "Chicago Economics: Permanence and Change," Journal of Economic Literature, American Economic Association, vol. 20(1), pages 1-38, March.
    3. Rodney D. Peterson & Ronnie J. Phillips, 1991. "In Memoriam," The American Economist, Sage Publications, vol. 35(1), pages 79-81, March.
    4. David Laidler & Roger Sandilands, 2010. "Harvard, the Chicago Tradition, and the Quantity Theory: A Reply to James Ahiakpor," History of Political Economy, Duke University Press, vol. 42(3), pages 573-592, Fall.
    5. Rutherford,Malcolm, 2013. "The Institutionalist Movement in American Economics, 1918–1947," Cambridge Books, Cambridge University Press, number 9781107626089, October.
    6. Patinkin, Don, 1973. "Frank Knight as Teacher," American Economic Review, American Economic Association, vol. 63(5), pages 787-810, December.
    7. Frank H. Knight, 1944. "Realism and Relevance in the Theory of Demand," Journal of Political Economy, University of Chicago Press, vol. 52, pages 289-289.
    8. Samuelson, Paul A, 1972. "Jacob Viner, 1892-1970," Journal of Political Economy, University of Chicago Press, vol. 80(1), pages 5-11, Jan.-Feb..
    9. repec:mes:jeciss:v:11:y:1977:i:3:p:485-525 is not listed on IDEAS
    10. J. M. Clark, 1918. "Economics and Modern Psychology: II," Journal of Political Economy, University of Chicago Press, vol. 26, pages 136-136.
    11. J. M. Clark, 1918. "Economics and Modern Psycholoy: I," Journal of Political Economy, University of Chicago Press, vol. 26, pages 1-1.
    12. Asso, Pier Francesco & Fiorito, Luca, 2004. "Human Nature and Economic Institutions: Instinct Psychology, Behaviorism, and the Development of American Institutionalism," Journal of the History of Economic Thought, Cambridge University Press, vol. 26(04), pages 445-477, December.
    13. F. H. Knight, 1921. "Cost of Production and Price over Long and Short Periods," Journal of Political Economy, University of Chicago Press, vol. 29, pages 304-304.
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    Keywords

    Chicago School; Institutionalism; Knight; Frank H.; Viner; Jacob;

    JEL classification:

    • B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Wicksellian)
    • B15 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Historical; Institutional; Evolutionary
    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies
    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School

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