The University of Chicago is home to an unusually innovative department of economics. The proportion of new ideas in economics over the last forty years that have emanated from or become associated with Chicago is astonishing. Any definition of the "Chicago School" would have to find room for the following ideas (in chronological order from the 1940s to the present): the economic theory of socialism, general equilibrium models of foreign trade, simultaneous equation methods in econometrics, consumption as a function of permanent income, the economics of the household, the rationality of peasants in poor countries, the economics of education and other acquired skills (human capital), applied welfare economics, monetarism, sociological economics (entrepreneurship, racial discrimination, crime), the economics of invention and innovation, quantitative economic history, the economics of information, political economy (externalities, property rights, liability, contracts), the monetary approach to international finance, and rational expectations in macroeconomics.
The unifying thread in all this is not political or ideological but methodological, the methodological conviction that economics is an incomparably powerful tool for understanding society.
North Central Association of Colleges and Schools, The Higher Learning Commission