Edmund Phelps and Modern Macroeconomics

Edmund S. Phelps and Modern Macroeconomics

It is not easy to summarize Ned Phelps’s monumental contribution to economics. A first impression is likely to be of a vast array of original concepts and models: the “natural rate of unemployment” and the expectations-augmented Phillips curve (1967, 1968, 1971), the “island” parable of search unemployment (1968, 1969, 1970), “incentive/efficiency wages” (1968), optimal inflation targeting over...

Edmund Phelps: Macroeconomist and Social Scientist∗

This paper recounts the major accomplishments of Edmund Phelps, winner of the 2006 Nobel Prize in Economics. (JEL code E0) ∗I thank David Laidler for valuable comments.

MacroeconoMics for a Modern econoMy

The modern economy began to supplant the traditional economy in several nations in the latter half of the 19th century – and many more in the latter half of the 20th. a system where self-employment and self-finance was typical gave way to a system of companies having various business freedoms and enabling institutions. This was the “great transformation” on which historians and sociologists as ...

Misesian Insights for Modern Macroeconomics

Disequilibrium macroeconomics: an episode in the transformation of modern macroeconomics

ed from issues they could not handle but which enabled them to analyse the dynamics in which they were interested. However, a more common reaction was to focus on the formal models and to confine their theorizing to what could be said rigorously. Founding macroeconomics on rigorous utilitymaximizing microfoundations was important. This was, no doubt, the reason why Patinkin’s Chapter 13 was neg...