2007-9-11

Edmund S. Phelps,1933-
An American economist
Economics professor at Columbia University, won the Nobel Prize in economics for his deep study on the trans-period trade in macroeconomic policy in 2006.

Phelps mainly studies each field of macroeconomics, including employment, inflation, deflation and economic growth. He explains the relationship between unemployment ratio and inflation anticipation. He also brings forward the capital accumulation "golden rule" based on the welfare, this thought requires that people's consumption can not sacrifice the consumption of offspring; the saving rate should arrive at a certain level if it is to realize the homology and maximum of the welfare of different generations.

The study of Phelps tells us that any policy has the income and cost; the preparer must scale the advantage and disadvantage comprehensively to remove many syndromes during the speedy growth of economy such as high energy consumption, high pollution, production capacity over-plus, environment deterioration and living condition declination. This sustainable development thought will be the long-term benefit of the people forever.

Figure 1: Short-term Phelps Curve and Long-term Phelps Curve

Figure 2: The Phelps Curve with Anticipation