American Edmund S. Phelps wins 2006 Nobel Economic Prize

U.S. economist Edmund S. Phelps has won the 2006 Nobel Economics Prize for advancing the understanding of important links between short-run and long-run effects of economic policy.

Phelps' study has shown that full employment, stable prices and rapid growth are central goals of economic policy. But there are always difficult goal conflicts over how inflation and unemployment should be balanced and what tradeoff should be made between the consumption of current and future generations.

The Royal Swedish Academy of Sciences said his study had "advanced our understanding of both of these trade-offs."

Phelps, 73, a professor of political economy at Columbia University in New York, is renowned "for his analysis of intertemporal tradeoffs in macroeconomic policy," according to the academy.

"Phelps' contributions highlighted the importance of analyzing how future possibilities of reaching the goals of stabilization policy are affected by today's policy," the academy said.

And his findings have had "a decisive impact on economic research as well as policy," it said.

The award ceremony is scheduled to take place in Stockholm on Dec. 10, the anniversary of the death in 1896 of the prize's creator Alfred Nobel. Phelps will receive the prize sum of 10 million Swedish kronor (1.37 million U.S. dollars).

Source: Xinhua