Edmund G. Phelps, Seminal Figure in Modern Economics, Wins Nobel Prize


Edmund Phelps

Edmund Phelps at the Nobel Prize Press Conference at Columbia University on October 9, 2006.

Photo credit: Diane Bondareff

Edmund Phelps, a seminal figure in modern economics, has won the 2006 Nobel Prize in Economics. Phelps is head of the Center on Capitalism & Society at Columbia University which conducts and promotes research on capitalism. He is McVickar Professor of Political Economy at Columbia.

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Phelps was recognized early in his career for his new ideas on economic growth produced at Yale's Cowles Foundation in the early 1960s and for his pioneering research on inflation, unemployment and business fluctuations conducted at the University of Pennsylvania in the late 1960s and at Columbia in the 1970s. The thread running through most of his theoretical work is the roles played by knowledge, beliefs, information and expectations in investment, research, adoption of innovations, inflationary and disinflationary disequilibria, involuntary unemployment, slumps and booms.

Phelps' current work is about the benefits and sources of a country's structural dynamism — the enterprise and creativity of entrepreneurs, the skill of financiers in selecting and supporting the best projects, and the knowledge managers draw upon in evaluating and making use of new methods and products. Every dynamic economy has its doldrums and even undynamic economies may rise, perhaps with delay, to an extraordinary opportunity. Yet great dynamism, he argues, brings advantages in virtually every dimension of economic performance, not just in productivity.

Phelps' own research on dynamism began in 1990 and 1992-93 at the European Bank for Reconstruction and Development, where he worked on the theory of capitalism and issues of mass privatization in eastern Europe. Later he turned to the functioning of the economic institutions in western Europe and those in the United States. He conducted research with a focus on the Italian economy as Senior Advisor to the Project 'Italy in Europe' at the Consiglio Nazionale delle Ricerche in 1997-2000. In 2001 he founded with Roman Frydman the Center on Capitalism & Society at Columbia University to conduct and promote research on capitalism.

Phelps was elected to membership in the National Academy of Sciences in 1981 at age 47. He is also a fellow of the American Academy of Arts and Sciences and of the Econometric Society. In 2000 he was named a Distinguished Fellow of the American Economic Association. Besides his B.A. from Amherst College in 1955 and his Ph.D. from Yale in 1959 he has six honorary doctorates: Amherst College (1985), University of Rome 'Tor Vergata' (2001), University of Mannheim (2001), Universidade Nova Lisbon (2003), University of Paris-Dauphine (2004) and, in October, the University of Iceland (2004). In May 2004 he was named an honorary professor at Renmin University, Beijing.