My journeys in economic theory

Phelps (Columbia Univ.), the 2006 recipient of the Nobel Prize in economics, is a towering economic theorist. This volume is his intellectual biography. Phelps is among the few economists who have integrated John Rawls's theory of justice into economics. As a replacement for Schumpeter's theory of innovation, he developed his own theory, "indigenous innovation," by which he means, "the kind of innovating that might bubble up within a nation," which draws on people's private observations, creativity, and originality. His fame in economics, however, rests largely on the role of inflation expectation, which led him (and, independently, Milton Friedman) to develop the "Augmented Phillips Curve." This theory contends that once the economy incorporates the expectation of economic agents of inflation, the trade-off between unemployment and inflation--known as the Phillips Curve--no longer holds. The Augmented Phillips Curve has become a staple of macroeconomics. Phelps ends his book with these words: "At present, there appears to be no reason to stop. My expectation is that there will be new questions to address and, with luck, new ideas bringing the answers." That is a befitting plan for a creative mind. Summing Up: Recommended. Graduate students and faculty. --Farhad Rassekh, University of Hartford