Columbia University Economics Professor Edmund Phelps has won the 2006 Nobel Prize for Economic Science for refining the Phillips Curve, which has become so basic to macroeconomic analysis that even we will study it in this class (see chapter 32 in the text entitled "Inflation and Growth-The Phillips Curve"). "NAIRU" above refers to the "Non-Accelerating Inflation Rate of Unemployment". Policy makers such as Federal Reserve Chairman Ben Bernacke use this model and the Taylor Rule when setting policy. This will all make more sense in a little while.
2 comments:
First of all, I'd like to point out this: "Phelps is the sixth American to win a Nobel this year, meaning that every prize except for the literature and peace awards, which are yet to be announced, have gone to Americans." to all the America doubters out there. See, our boys have still got it! Physics, chemistry, medicine, economics, all very important endeavors, being pioneered by good ol’ Americans.
There is not much room for me to give an opinion in this article besides on some points which I find to be interesting. "Phelps' work has fundamentally altered our views on how the macroeconomy operates...
Phelps has advanced the understanding of the central goals of any sound economic policy." Sounds like a wonderful achievement to me. So does "Phelps also pioneered the analysis of the importance of human capital, or workers themselves” but come on why were we forgetting about the people???
Don't hold your breath for a US award in the peace category.
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