Wednesday, October 11, 2006

Edmund S. Phelps

Phelps is the latest winner of the Nobel Prize in Economics. For the record, macro is much harder than micro in economics (that is, of course, my own opinion.) I found that you need to have a good knowledge of micro to do macro, because many macro theories are built on micro foundation.

To Beaumont Cote:

Phelps's biggest contribution in economics is modifying the Phillips Curves - blending rational expectation in the model. I think I left some extensive comments on the Phillips Curves and rational expectation on your blog before. The Phillips Curves is a model that links inflation to unemployment. According to the model, those two are correlated.


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