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My Journeys in Economic Theory – Edmund Phelps

by Venky

(Image Credit: cup.columbia.edu)

Breezy, candid, refreshing and a tad dense in some passages (especially for someone who does not consider economics to be his/her first language), My Journeys in Economic Theory is all about bucking the trend and challenging received wisdom. the winner of the Nobel Memorial Prize in Economic Sciences in 2006, the founding director of the Center on Capitalism and Society and McVickar Professor Emeritus of Political Economy at Columbia University, Edmund Phelps has and continues to have a storied career in his chosen profession. An accomplished trumpet player, Phelps has been associated in various capacities with the RAND Corporation, the Cowles Foundation at Yale (where he got his PhD in 1959), Penn and Columbia University.

Phelps is famous for his forays into the complex field of ‘imperfect information’. In a work Microeconomic Foundations of Employment and Inflation Theory, Phelps asserted that that workers, customers, and corporations must make many decisions sans full or contemporaneous information. This lacuna is offset by forming expectations to fill in for the missing information.

In a famous departure from the much vaunted and touted Schumpeterian theory of creative destruction, Phelps, postulated that economic progress and scientific innovation is not always an exogenous event in so far as that such ideas spring from outside a country before being imported into it. The enthusiasm and aspirations of people within, non-material rewards of work: being engaged in projects, the delight of succeeding at something and the experience of flourishing are critical factors that spur innovation. This facet found detailed expression in Phelps’s book Flourishing.

My Journeys in Economic Theory also regales the readers about the spirited and invigorating deliberations and debated which Phelps has had over the course of his professional career with some absolute colossal figures spanning myriad discipline such as Paul Samuelson, John Rawls, James Tobin etc. The book also contains some heartwarming reminiscences about Phelps’s love towards music and the arts.

My Journeys in Economic Theory – a recollection of candour, cause, and consequence.  

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