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Edmund Phelps

And here we start with the narrative of his life in a detailed manner of birth and upbringing and education:-
Born on July 26, 1933, in Evanston, Illinois, United States of America, after receiving his high school degree, Phelps joined the Amarist College in Massachusetts and studied economics, a science that marked him afterwards and became one of his famous professors, received a message Under the supervision of James Tobin, a prominent economist from Bell University, after receiving his doctorate, he spent about a year at the Rand Foundation in Los Angeles, then returned to Belle, then worked as a teacher at MIT for a year, then worked at the University of Pennsylvania and after him. A Columbia University.

Economic Research:-
He has many important economic researches that still represent the basic rules of economists, Phelps has studied about the effects of the balance between inflation and unemployment, as well as the savings rates and the formation of capital on the macro-economy in the short and long term and from his research in Economy is what he said in the relationship between wages, prices, and inflation, where he said that when fixing prices and negotiating wages, employers and workers make judgements about future inflation that thus affect actual inflation and as a result the long-term unemployment rate is not affected Inflation, but it is determined by the mechanisms of the labour market, hence Phelps has changed the dominant view of the way in which the macro-economy works.
According to Phelps, the current inflation policy is an investment in lowering inflation forecasts, allowing for a better balance between inflation and future unemployment.
In 1961, Phelps set up the golden rule of capital, which is based on the idea that the level of consumption must be the same for all generations, and that the base is based on the fact that the savings rate should equal the rate of return on capital of national income, with the aim of achieving the social welfare of all generations, and has circulated Philip o The golden rule to include the importance of investing in human capital, research and technology in the growth process.

Honours and awards:

In 2006, the Royal Swedish Academy of Sciences announced the winner of the 2006 Nobel Prize for Economics, and Edmund Phelps came as the winner of the award with merit as a result of his economic research on the link between prices, unemployment and inflation forecasts, and won his research in the 1960s that tested The premise that policymakers can target low inflation or low unemployment, but not both. 

What the academy said about him and the reasons for winning the award was that Phelps had discovered trends in wages and prices that depended on inflation forecasts as well as on the labour market situation.

Phelps wrote several articles about the theory of economic Justice and published a book on the subject in 1974, a book of high importance and still used in the field of economics to date, and he authored the book “Fundamentals of the overall economy in employment and inflation theory”, this work Through which he made major contributions in the field of economic theories.

Edmund Phelps, the winner of the 2006 Nobel Prize in Economics, is Director of the Center on Capitalism and Society at Columbia University. Born in 1933, he spent his childhood in Chicago and, from age six, grew up in Hastings-on Hudson, N.Y. He attended public schools, earned his B.A. from Amherst (1955) and got his Ph.D. at Yale (1959). After a stint at RAND, he held positions at Yale and its Cowles Foundation (1960 – 1966), a professorship at Penn and finally at Columbia in 1971. He has written books on growth, unemployment theory, recessions, stagnation, inclusion, rewarding work, dynamism, indigenous innovation and the good economy.

His work can be seen as a lifelong project to put “people as we know them” into economic theory. In the mid-‘60s to the early ‘80s, beginning with the “Phelps volume,” Microeconomic Foundations of Employment and Inflation Theory (1970), he pointed out that workers, customers and companies must make many decisions without full or current information; and they improvise by forming expectations to fill in for the missing information. In that framework, he studied wage-setting, mark-up rules, slow recoveries and over-shooting. This served to underpin Keynesian tenet that say a cut in the money supply will not merely cause prices and wages to drop with no prolonged effect on employment.

From the mid-‘80s to the late ‘90s, he put aside the short-termism and monetarism of MIT and Chicago to develop a “structuralist” macroeconomics. Contrary to what Keynesian extremists see as unending and unexplained deficiency of “demand,” he sees employment heading to its “natural” level and seeks to explain the effects of structural forces on it. His book Structural Slumps (1994) and later papers with Hian Teck Hoon and Gylfi Zoega find an economy’s natural employment level is contracted by increases in household wealth, in overseas interest rates and by currency weakness. Thus, the big job losses in the US, UK and France result from the pile-up of wealth and puny investment, both stemming from the slowdown of productivity growth.

Now he has worked to put economics on a new foundation. Powerful innovation over more than a century alters the nature of the advanced economies: Having higher income or wealth matters less. As his book Rewarding Work (1997) begins to argue, what matters more are non-material rewards of work: being engaged in projects, the delight of succeeding at something and the experience of flourishing on an unfolding voyage. His book Mass Flourishing (2013) remarks that cavemen had the ability to imagine new things and the zeal to create them. But a culture liberating and inspiring the dynamism is necessary to ignite a “passion for the new.”

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