Phelps v. the Phillips curve
My daughter tracked down the great Milton Friedman to explain the significance of the research that won Columbia's Edmund Phelps the Nobel Prize for Economics yesterday: "Columbia Professor Phelps wins Nobel Prize in economics." In the paper's editorial, Professor Phelps is feted:
It's hard to think of a more delightful and satisfying piece of news than word that the Nobel prize in economics has gone to Columbia University's Edmund "Ned" Phelps. He and his wife Viviana are not only wonderful individuals, as we learned on several occasions in the past few years, but in a career spanning more than four decades, there are few economic puzzles to which Mr. Phelps has not turned his intellect. He earned the prize for his work on the particular problems lying at the intersection of monetary policy, inflation control, and employment, but for the past few years he has been speaking regularly about the importance of that quality, which almost defines the city where he and Viviana have made their home — "dynamism."***
That Mr. Phelps would win the Nobel was predicted to us — quietly but firmly — by Amity Shlaes after a dinner party a year or so ago at the Phelps' home. We don't agree with him on everything (he opposed the Bush tax cuts). But so much the better. He may not be a native New Yorker (he was born in Evanston, Ill.), but he has become a New Yorker to the quick. He attended public school at Hastings-on-Hudson before heading to Amherst, and has been at Columbia since 1971. He and his wife have held season tickets at the Metropolitan Opera since 1974. He enjoys the grilled cheese at Tom's diner in Morningside Heights. His academic home is a department that Columbia has built up since a slump in the 1970s to become itself a leading light of intellectual dynamism that has produced four Nobel economists in the past decade, more than any other American university. It can't be a coincidence that a New Yorker would be one of the most enthusiastic scholars of dynamism in economics.
