Which is the greatest university economics department of them all? Many people would answer “Chicago.” After all, University of Chicago econ has a whole school of thought named after it — the Chicago school is a term used to refer to free-market fundamentalism and the belief that economic actors are always rational. Chicago is home to the largest number of Nobel laureates in economics, and has been home base for such titans as Milton Friedman, Robert Lucas and Gary Becker.
Paul Krugman, himself until recently a Princeton economics professor, begs to differ. It isn’t Chicago, he contends, but the Massachusetts Institute of Technology that has had the greatest impact — at least in the field of macroeconomics — in recent decades. It’s the M.I.T. students, not the professors, that Krugman says have come to dominate the field, especially students of Stanley Fischer and Rudi Dornbusch.
Krugman has a point. Still, when I think of the economics department that has had the most influence on the profession in the past four decades, another candidate springs to mind: the University of California-Berkeley.