Edmund Phelps facts for kids
Quick facts for kids
Edmund Phelps
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Phelps in 2017
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| Born | July 26, 1933 Evanston, Illinois, U.S.
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| Nationality | American |
| Institution | RAND Corporation Cowles Foundation University of Pennsylvania Columbia University |
| Field | Macroeconomics |
| Doctoral advisor |
James Tobin Arthur Okun |
| Doctoral students |
Gylfi Zoega Hian Teck Hoon |
| Influences | Paul Samuelson William Fellner Thomas Schelling John Rawls |
| Contributions | Microfoundations of macroeconomics Expectations in wage and price-setting Natural rate of unemployment Statistical discrimination Structural slumps Imagination in innovating Golden Rule rate of saving |
| Awards | Nobel Memorial Prize in Economic Sciences, 2006 Chevalier de la Legion d'Honneur, 2008 Pico Mirandola Prize, 2008 Global Economy Prize, 2008 China Friendship Award, 2014 |
Edmund Strother Phelps (born July 26, 1933) is an American economist. He won the 2006 Nobel Memorial Prize in Economic Sciences.
Early in his career, he studied how economies grow. He showed the idea of the golden rule savings rate. This idea helps countries decide how much to save and invest for the future.
Phelps taught at the University of Pennsylvania and then at Columbia University. He developed the idea of the natural rate of unemployment. This helps us understand how many people are typically unemployed. Later, he began studying how businesses come up with new ideas.
He also helped start the Center on Capitalism and Society at Columbia University in 2001.
Contents
Early Life and Education
Phelps was born on July 26, 1933, in Evanston, Illinois. When he was six, his family moved to Hastings-on-Hudson, New York. He went to school there.
In 1951, he started college at Amherst College. His father suggested he take an economics class. He was very interested in how math could be used to understand business. He noticed a problem in how different parts of economics (microeconomics and macroeconomics) connected.
After getting his first degree in 1955, Phelps went to Yale University. He studied under famous economists like James Tobin. He earned his Ph.D. in Economics from Yale in 1959.
Key Economic Ideas
After his Ph.D., Phelps worked at the RAND Corporation. But he wanted to focus on bigger economic questions. So, he returned to teaching at Yale and doing research at the Cowles Foundation.
The Golden Rule of Saving
In 1961, Phelps published a famous paper about the Golden Rule savings rate. This idea helps countries figure out the best amount to save and invest. It aims to make sure future generations are as well off as possible.
Understanding Unemployment and Prices
In 1966, Phelps moved to the University of Pennsylvania. There, he studied how jobs, wages, and prices are connected. His research helped explain the Phillips curve. This curve shows the relationship between unemployment and inflation.
Phelps showed that people's expectations about prices and wages are very important. He also introduced the idea of the natural rate of unemployment. This is the lowest unemployment rate an economy can have without causing inflation to speed up. He argued that in the long run, government policies to boost demand might not change the unemployment rate.
New Ways of Thinking about Economics
In the 1970s, Phelps and other economists worked on new ways to understand how the economy works. They looked at how wages and prices might be "sticky." This means they don't change right away. This idea helped create what is now called New Keynesian economics.
Phelps also studied statistical discrimination. This is when people are treated differently based on group averages, not individual traits. He also looked at ideas of economic justice.
In 1971, Phelps joined Columbia University. He continued his research on inflation and how government spending affects it. He also wrote about hysteresis in unemployment. This means that long periods of unemployment can make it harder for people to find jobs later.
Later Research and Views
In the 1980s, Phelps became a professor at Columbia. He also worked with universities in Europe. He studied why unemployment stayed high in Europe during the 1980s. He believed it was due to deeper changes in the economy.
Structural Slumps and Booms
In the 1990s, Phelps developed a new theory. He called it "structural slumps." This theory explains that big economic changes are not just about money. They are also about things like interest rates and new technologies. He argued that the ups and downs of the economy come from non-money factors.
He also looked at how to help disadvantaged workers find jobs and earn better wages. He wrote a book for the public called Rewarding Work in 1997.
Focus on Innovation and Dynamism
Phelps's recent work focuses on how a country's "dynamism" helps it grow. Dynamism means how much new ideas, creativity, and risk-taking there is in business. He believes that a lively business sector helps people use and develop their talents.
He argues that governments should create policies that encourage this dynamism. In 2001, he helped start the Center on Capitalism & Society at Columbia. This center studies how capitalism works.
After the 2008 financial crisis, Phelps criticized some older economic models. He also suggested that economists should keep looking for new ideas, just as John Maynard Keynes would have done.
His 2013 book, Mass Flourishing, talks about how ordinary people's creativity drives economic growth. He believes that a culture that encourages new ideas is key to success.
Phelps has also shared his opinions on economic policies. He signed a letter with other Nobel laureates in 2024. They warned about the possible effects of certain economic policies on inflation.
Personal Life
In 1974, Edmund Phelps married Viviana Montdor.
Awards and Honors
In 2006, Edmund Phelps received the Nobel Memorial Prize in Economic Sciences. He won it for his work on how economic policies affect the economy in both the short and long term. The Royal Swedish Academy of Sciences said his work helped us understand these connections better.
He has received many other honors, including:
- Being named a Distinguished Fellow of the American Economic Association in 2000.
- Becoming a Chevalier of France's Legion of Honor in 2008.
- Receiving the Global Economy Prize in 2008.
- Getting the Chinese Government's Friendship Award in 2014.
Phelps has also received honorary degrees from many universities around the world.
See also
In Spanish: Edmund S. Phelps para niños
