Professor Edmund S. Phelps was born in 1933 in Chicago and grew up in Hastings-on-Hudson, N.Y. He received his B.A. at Amherst College in 1955 and his Ph.D. at Yale in 1959. He joined the Department of Economics at Columbia in 1971 after several years at Pennsylvania and earlier at Yale. Columbia named him McVickar Professor of Political Economy in 1982.
As an economic theorist, Professor Phelps is concerned with the imperfect knowledge and imperfect information of market participants and with the effects their beliefs and expectations have on market outcomes. As an economic practitioner, he has most often focused this perspective on unemployment determination and, relatedly, the nature and importance of jobs.
He first became known for his ideas on the creation of economic growth íV research, education and the 'golden rule' íV at Yale's Cowles Foundation in the early 1960s. Perhaps his most seminal work was his rudimentary theory of a 'natural' rate of unemployment íV its existence, how its size is determined and how market forces may drive unemployment from it. This work was collected in the volume Microeconomic Foundations of Employment and Inflation Theory (1970). Later he revisited the natural rate, showing in Structural Slumps (1994) that changing market forces accounted for much of its shifting character. Subsequently, in his Rewarding Work (1997) he focused on joblessness among less advantaged workers, arguing that the problem solving offered by good jobs is generally necessary for personal development.
He then moved on to alternative economic systems and the contrasting consequences for personal growth and satisfaction. In lectures, columns and his Enterprise and Inclusion in Italy (2002) he laid the European continent's economic problems to a dearth of 'dynamism' and ascribed it mainly to the Continent's 'corporatism' rather than to taxes on labor and social insurance. Much of his present-day work is aimed at modeling capitalism.
Professor Phelps is founding director of Columbia's Center on Capitalism and Society, formed in 2001. He was Senior Advisor to the project 'Italy in Europe' of Italy's CNR from 1997 to 2000. He was a charter member of the Economic Advisory Council of the EBRD and was editor and senior writer for the Annual Economic Outlook (1993). He was on the International Panel of the OFCE in Paris in the early 1990s. He was co-organizer of the Villa Mondragone seminars in Rome from 1990 to 2000 and of the International School of Economics in Siena from 1987 to 1990. He was a consultant for the OECD in 1999, the CBO in 1994, the EC in 1987, Banca d'Italia in 1985, the IMF in 1983 and 1985, the FRB in 1983, the Senate Finance Committee in 1975 and the U.S. Treasury Department in 1972.
Professor Phelps was elected to the National Academy of Sciences (USA) in 1982 at age 48. He is also a fellow of the American Academy of Arts and Sciences and of the Econometric Society. In 1982 the American Economic Association elected him Vice President and in 2000 named him a Distinguished Fellow. He has honorary doctorates from Amherst College (1985), University of Rome 'Tor Vergata' (2001), University of Mannheim (2001), Universidade Nova Lisbon (2003), University of Paris-Dauphine (2004) and the University of Iceland (2004); also several honorary professorships from China. In 2003 Princeton University Press published a 600-page Festschrift in his honor: Knowledge, Information and Expectations in Modern Macroeconomics, edited by Philippe Aghion, Roman Frydman, Joseph Stiglitz, and Michael Woodford.