October 10th, 2006 04:11 EST
Columbia University Professor Wins 2006 Nobel Prize in Economics
Washington -- Edmund S. Phelps, a professor at Columbia University in New York City, has won the 2006 Nobel Prize in economics for his influential work in explaining the complex relationship between unemployment and inflation in the making of economic policy.
In its announcement on October 9, the Swedish Royal Academy Nobel Committee said that Phelps' research "has deepened our understanding of the relation between short-run and long-run effects of economic policy."
Phelps developed economic models that challenged the conventional view in the 1950s and 1960s of a stable relationship between inflation and unemployment known as the Phillips Curve.
In his research, Phelps demonstrated that the interaction of inflation and unemployment was much more complex, and that employment levels also depended heavily on the expectations that workers and employers held about future inflation.
According to the Swedish Academy's citation, "Phelps showed how the possibilities of stabilization policy in the future depend on today's policy decisions: low inflation today leads to expectations of low inflation also in the future, thereby facilitating future policy making."
"That idea has been accepted all over the world," said Bertil Holmlund of the Academy prize committee said in a news interview. "It has been a resounding success story."
As a result of his research, the Academy said, ""Phelps' work has fundamentally altered our views on how the macro economy operates."
Phelps, 73, has been a professor of political economy at Columbia University since 1982. He was born in Chicago, Illinois, earned a bachelor's degree from Amherst College in Massachusetts in 1955 and a doctorate from Yale University in Connecticut in 1959.
Upon getting the news, Phelps said he planned to teach his regular Monday class at Columbia, but the department probably would celebrate later with champagne, according to the Associated Press.
Phelps is the sixth American to win a Nobel Prize in 2006.
For studies of how genes function at the molecular level, Robert Kornberg of Stanford University won the Nobel Prize in chemistry. (See related article.)
The Nobel Prize for physics was awarded to John Mather of the Goddard Space Flight Center in Maryland and George Smoot of the Department of Energy's Lawrence Berkeley National Laboratory in California for insights into the early formation of the stars and galaxies in the universe. (See related article.)
Andrew Fire of the Stanford University School of Medicine in California, and Craig Mello of the University of Massachusetts Medical School received the Nobel Prize in medicine for their work on mechanisms that control the flow of genetic information. (See related article.)
The 2006 Nobel Laureates will gather in Stockholm on December 10 to receive their Nobel Prize Medals, diplomas and monetary awards ($1.37 million for each prize) from King Carl Gustav XVI of Sweden.
(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)