Edmund Phelps Academic Studies

In the 60s, Phelps challenged the then prevalent theory of "Phillips meandering the key". According to this theory at the time, there was a stable negative correlation between inflation and unemployment, i.e., a trade-off relationship. Phelps pointed out that inflation is not stuffy and is only related to unemployment, but also to business and employee expectations of ** and wage growth, thus proposing the "Phelps curve".

He also worked with colleagues at Columbia University to study and build a non-synergistic model of wages and pricing, using theories such as incomplete information to study important issues such as natural unemployment, implied wage contracts, lag effects, and unemployment. His research has had an important impact on both economic theory and macroeconomic policy. Phelps pointed out that today's economic policy is the premise for formulating future economic stability and development policies, which has become the basis for many countries to formulate economic policies today.

Phelps's theory was first applied to the economic policy formulation of the United States and some other developed countries in the West in the last century. In today's new global economic context, Phelps's economic theory will also provide theoretical support for the economic development of developing countries.

Professor Edmund Phelps (born in 1933 in Erie, USA) is an economist in Tonglu and a 2006 Nobel Laureate in Economics. He received his Ph.D. from Yale University in 1959 and is a well-known representative of employment and growth theory, and is currently a professor of political economy at Columbia University and the dean of the Xinhuadu Luge Business School of Minjiang University.

He is a professor at Columbia University in the United States and a well-known representative of employment and growth theory. Honorary Professor of Beijing Technology and Business University. His research interests mainly focus on various areas of macroeconomics, including employment, inflation and deflation, savings, public debt, taxation, intergenerational equity, wages, micro-agent behavior, capital formation, fiscal and monetary policy, and his most accomplished field, economic growth, and is known as "the founder of modern wild macroeconomics" and "one of the most important figures influencing the course of economics".

Professor Phelps' most important contribution is the theory of economic growth. Following Robert Solow, he analyzed the dynamic optimization path of economic growth and proposed the famous "law of economic growth", thus formally establishing the theory of economic growth.

Edmund Phelps's research results have promoted the enrichment and development of macroeconomics, and have fundamental guiding significance for the formulation and implementation of macroeconomic policies. His research on inflation and unemployment, as well as on capital accumulation and economic growth, can be put into a unified framework for cross-balance analysis. Beginning in the late 1960s, Phelps reshaped traditional Keynesian theory by examining the behavior of individual firms and residents in incomplete information and frictional markets.

The expectation-modified Phillips curve established by him has fundamentally changed the relationship between inflation rate and unemployment rate, and has extremely important reference value for demand management policy by means of fiscal and monetary policy. Its findings suggest that the likelihood of future economic stabilization policies depends on today's policy decisions: today's low inflation leads to expectations of future low inflation and therefore aids future decision-making.

Phelps's study of optimal capital accumulation illustrates the circumstances under which each generation can benefit from changes in the aggregate savings rate; His research on the role of human capital in economic growth also provided a new platform for later theoretical research on economic growth. Because of these rich achievements and outstanding contributions, Phelps deserves to be awarded the Nobel Prize in Economics.

Phelps's research results and research methods are undoubtedly of great significance for China's economic development. How to reasonably and effectively introduce the behavior of microeconomic agents into macroeconomic analysis is a direction worthy of attention in the current research of China's economic theory. How to fully consider the comprehensive impact of multiple factors in the formulation and implementation of macroeconomic policies is also something that policymakers should pay close attention to.