Chicago Schooled, or How I spent my summer vacation, part one

Most of my summer was dedicated to working on three pieces. The first to come out, Chicago Schooled, looks at what the global recession might mean for the Chicago School of economics.

I think the Chicago School being blamed in some corners for the recession no longer exists, and may never have existed (though that line was cut from this story, with my agreement). I was thus a little surprised by Paul Krugman’s attack on the Chicago School in How Did Economists Get It so Wrong?, in part because his depiction of Milton Friedman shows that “Chicago School” has become a rhetorical device, not a reflection of the actual school of thought. It was odd to see Krugman make John Cochrane the face of the Chicago School; even Cochrane says his views are not in the mainstream at Chicago (here’s Cochrane’s response).

It also provoked headscratching on my part that Krugman didn’t mention this year’s Dahlem Report (a good discussion and a link to the PDF of the report are here), in which eight economists accused economic scholars of being (gasp) out of touch with the real world and the entire profession in need of significant reform. Perhaps when you’re Paul Krugman, you don’t need someone else’s validation for your views.