Roads to Wisdom, Conversations with Ten Nobel Laureates in Economics

Roads to Wisdom, Conversations with Ten Nobel Laureates in Economics

Karen Ilse Horn

Karen Horn’s remarkable interviews with ten Nobel Laureates explore the conditions required for scientific progress by navigating the ‘roads to wisdom’ in economic science.

Chapter 12: Edmund S. Phelps

Karen Ilse Horn

Subjects: economics and finance, history of economic thought


Columbia University, New York, USA © Peter Badge/Typos1 in cooperation with the Foundation Lindau Nobelprizewinners Meetings at Lake Constance, all rights reserved. The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2006 ‘for his analysis of intertemporal tradeoffs in macroeconomic policy’. INTRODUCTION It’s a beautiful warm summer day, and it’s definitely nicer outside than inside the ‘Center on Capitalism and Society’, a number of rather charmfree office cubicles at The Earth Institute in Columbia’s Hogan Hall, which Edmund S. Phelps presents with an ironic grin: ‘Well, this is it.’1 The Center has been created in 2004 with money from the Kauffman foundation.2 Its purpose is to go beyond the mainstream models of markets to a serious study of capitalism, to the questions about its dynamism and its stability and how capitalism compares in these respects with its rivals, corporatism and market socialism. Such a study is imperative because a country needs to have a more thorough and reliable understanding . . . to make institutional choices. . .3 241 242 Roads to wisdom, conversations with ten Nobel Laureates in economics Interestingly, the Center has a rather ‘Austrian’ research agenda, and Phelps himself dryly affirms: ‘Capitalism is Hayek country.’4 But most of the Center’s members can be said to be eclectic neo-Keynesians. Phelps himself is the embodiment of such a mixture, fully appreciating the selfregulating and knowledge-generating forces of market interaction on the one hand while not having excessive qualms about asking for some kind of state intervention on the other hand. Members...

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