Milton Friedman found an intellectual home when he joined the University of Chicago economics faculty in 1946. He spent most of the rest of his career here and remained closely associated with the University throughout his life.
Unquestionably one of the most influential economists and scholars of the 20th century, Friedman received every honor an economist can be awarded, beginning with his receipt of the Clark Medal given every second year by the American Economic Association to the best American economist under 40. He became a member of the National Academy of Sciences when the economics section was first formed. He was elected president of the American Economic Association in 1967, and his presidential address, "The Role of Monetary Policy," remains a classic.
Friedman was awarded the Nobel Prize in 1976 and later the National Medal of Science for his development of the permanent income model of consumption and for his work on monetary history and policy. His seminal theory on consumption—that individuals spend and consume based on expectations of earnings over their lifetime, not just current income—is the precursor to modern models of consumption-savings decisions relevant for both macroeconomics and microeconomics.
In part, his aim was to provide a framework for integrating microeconomic and macroeconomic evidence on consumption and savings behavior as a crucial input into the study of the macroeconomic economy. To understand the role of macroeconomic policy, he worked with Anna Schwartz to develop a comprehensive history of monetary policy. Their book continues to be the important empirical reference for students of monetary economics.
The University of Chicago honored Milton Friedman in celebration of his 90th birthday. During the celebration, he reminded us of what is special about the University:
“During the periods I was at Chicago I had several offers to move elsewhere…. But I couldn't bring myself to leave Chicago, not because of its beautiful climate, but because of the quality and the spirit and the attitude in the Economics Department and indeed the University at large. It's a wonderful place, where people are interested in understanding things and getting at the bottom of things, at the truth, and not primarily in creating a particular record or getting their name in the paper.”
The Milton Friedman Institute was established in 2008 to encourage and enhance the level of scholarship embodied in Friedman's uncompromising scholarship and to promote the spirit of inquiry he so admired at Chicago. In June 2011, the Institute joined with the Becker Center on Chicago Price Theory to become the Gary Becker Milton Friedman Institute for Research in Economics, honoring and extending the work of both icons in the field.