Edmund Phelps facts for kids
Quick facts for kids
Edmund Phelps
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Phelps in 2008
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Edmund Strother Phelps
July 26, 1933 Evanston, Illinois, U.S.
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| Died | May 15, 2026 (aged 92) New York, U.S.
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| 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 (July 26, 1933 – May 15, 2026) was a famous American economist. He won the Nobel Prize in Economics in 2006. He helped us understand how economies grow and how people's expectations affect jobs and prices.
Early in his career, Phelps studied how countries could save and invest wisely for the future. He explored how much a nation should spend now versus saving for later generations. This idea is called the Golden Rule of Saving.
Later, he developed important ideas about how jobs are created and how wages and prices change. He introduced the idea of the natural rate of unemployment. This helped explain why there are always some people looking for work, even in a healthy economy. He also studied how new ideas and inventions (innovation) drive businesses.
Phelps was a professor at Columbia University for many years. He also started a center there to study capitalism and society.
Contents
Growing Up and Learning About Economics
Edmund Phelps was born in Evanston, Illinois, on July 26, 1933. 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. This class used a famous textbook by Paul Samuelson. Phelps found it fascinating how math and logic could be used to understand businesses. He noticed that there was a big puzzle in economics: how to connect the study of small parts of the economy (like individual businesses) with the study of the whole economy (like a country's jobs and prices).
After college, Phelps went to Yale University for more studies. He learned from brilliant teachers, including some who later won the Nobel Prize. He earned his Ph.D. in Economics from Yale in 1959.
Important Economic Discoveries in the 1960s and 1970s
After getting his Ph.D., Phelps worked at the RAND Corporation. But he wanted to focus on big-picture economics, so he returned to teaching and research.
In 1960, he joined the Cowles Foundation at Yale. There, he studied how economies grow over time. In 1961, he wrote a famous paper about the Golden Rule savings rate. This idea helps countries decide how much to save and invest for the future. He also explored other economic topics, like how money works in an economy.
Phelps worked with many other smart economists, including future Nobel Prize winners. He visited MIT and met more leading thinkers in economics.
In 1966, Phelps became a professor at the University of Pennsylvania. His research there focused on how jobs, wages, and rising prices (inflation) are connected. He wrote an important paper in 1968. This paper explained how people's expectations about prices and wages affect the job market.
He also introduced the idea of the natural rate of unemployment. This means there's always a certain level of unemployment, even when the economy is doing well. His work suggested that government policies might only have short-term effects on unemployment.
In 1971, Phelps moved to Columbia University. He continued his research on inflation and how government spending (fiscal policy) affects it. He also wrote about "statistical discrimination," which is about how groups of people might be treated differently in the economy based on averages, not individual skills.
Later, Phelps and his colleagues explored how people's expectations influence the economy. They looked at why wages and prices don't always change quickly. This research helped create new ideas in economics, especially after the 2008 financial crisis showed some older models weren't perfect.
Exploring Economic Challenges in the 1980s
In 1982, Edmund Phelps became a special professor at Columbia University. He also wrote a textbook about economics in 1985.
During the 1980s, Phelps worked with many universities and groups in Europe. He noticed that many European countries had high unemployment for a long time. This was a puzzle because inflation wasn't stopping. He thought this wasn't just a temporary problem. He believed it was due to deeper changes in the economy.
Phelps worked to create a new theory to explain why the natural rate of unemployment might change. He published some of his ideas in a 1994 book called Structural Slumps. This book looked at how things like interest rates and new technologies affect jobs.
Ideas for a Changing World in the 1990s
In 1990, Phelps traveled to Moscow to help with economic changes in the former Soviet Union. He became very interested in how countries in Eastern Europe were changing their economies.
He continued to develop his ideas about why unemployment rates change. His 1994 book, Structural Slumps, explained why Europe had high unemployment in the 1980s. He suggested it was due to things like global interest rates and less chance for new technology. He believed that big economic changes are often caused by things other than just money.
In the mid-1990s, Phelps also studied "economic inclusion." This means making sure everyone has a fair chance to find good jobs and earn decent wages. In 1997, he wrote a book called Rewarding Work. It discussed how to help people who struggled to find jobs or had low pay.
Later Work and Views on Innovation
Phelps's later work focused on what makes a country's economy dynamic and creative. He believed that the energy and new ideas of entrepreneurs, the skills of people who fund projects, and the knowledge of managers are all very important. He argued that a dynamic economy brings benefits in many ways, not just in how much it produces.
For Phelps, a creative business world helps people explore and develop their talents. He thought that governments should create policies that encourage a dynamic business sector where everyone can participate.
He started the Center on Capitalism & Society at Columbia University in 2001. This center studies how capitalism works.
After the Great Recession in 2008, Phelps shared his thoughts on economic models. He criticized some older models but also questioned new ideas from John Maynard Keynes. He believed that economists needed to keep developing new theories.
From 2006 onwards, Phelps mainly researched how innovation and economic growth are driven by the creativity of everyday people. His 2013 book, Mass Flourishing, suggested that while people have always had the ability to imagine and create, a culture that encourages new ideas is essential.
Phelps also shared his opinions on economic policies. He, along with other Nobel Prize winners, signed a letter in June 2024. They warned that certain policies could lead to more inflation in the United States.
Personal Life
In 1974, Edmund Phelps married Viviana Montdor. He passed away in New York on May 15, 2026, at the age of 92.
Awards and Recognition
Edmund Phelps received many honors for his important work.
- In 1981, he became a member of the National Academy of Science in the USA.
- In 2006, he was awarded the Nobel Prize in Economics. The award recognized his studies on how economic policies affect things in the short and long term.
- In 2000, he was named a Distinguished Fellow of the American Economic Association.
- In 2008, he received the French Legion of Honor and the Global Economy Prize.
- In 2014, he received China's Friendship Award and the Wilbur Lucius Cross Medal from Yale University.
Phelps also received honorary degrees from many universities around the world. These degrees recognized his academic achievements.
See also
In Spanish: Edmund S. Phelps para niños
