How to do Chicago Economics
Here are two discussions about how Chicago teaches economists to do economics. Both Reder and McCloskey say that when the evidence contradicts ideology, stick with the ideology.
McCloskey, Donald N. 1985. The Rhetoric of Economics (Madison: The University of Wisconsin Press).
140: “In seminars in economics it is common for the speaker to present a statistical result, apparently irrefutable by the rules of positive economics, yet to be met by choruses of “I can’t believe it” or “It doesn’t make sense.” Milton Friedman’s own Money Workshop at Chicago in the late 1960s and the early 1970s was a case in point.”
Reder, Melvin W. 1982. “Chicago Economics: Permanence and Change.” Journal of Economic Literature, 20: 1 (March): pp. 1-38.
13: “Any apparent inconsistency of empirical findings with implications of the theory, or report of behavior not implied by the theory, is interpreted as anomalous and requiring one of the following actions: (i) re-examination of the data to reverse the anomalous finding; (ii) redefinition and/or augmentation of the variables in the model…; (iii) alteration of the theory to accommodate behavior inconsistent with the postulates of rationality… (iv) placing the finding on the research agenda as a researchability anomaly.” Chicago tends to shun iii.
13: It is customary to confront theory with evidence. By contrast, “Chicago economists tend strongly to appraise their own research and that of others by a standard that requires [inter alia] that the findings of empirical research by consistent with the implications of standard price theory.”