The paper evaluates the contribution of Nobel Prize-winning American economist Edmund Phelps to the development of contemporary economics. The authoress analyzes Phelps' structuralist theory of employment and compares his views with the ideas of other acclaimed economists such as Milton Friedman, John M. Keynes, and Friedrich A. Hayek. She looks at Phelps' achievements in the context of the Swedish Royal Academy of Sciences' decision to grant him a Nobel Prize, and describes Phelps' position on some key dilemmas of 20th century economics. According to her, the assessment of Phelps' achievements offered by the Royal Swedish Academy of Sciences is in fact incomplete, because it overlooks his structuralist theory of employment. Phelps, who calls himself a structuralist, considers this theory of employment to be his most important contribution to macroeconomics. Phelps' achievements cannot be viewed exclusively in terms of the link between inflation and unemployment. It is necessary to consider the economist's focus on what he described as 'endogenizing the natural rate of unemployment', an approach that reveals the differences between Phelps' theory and those of Keynes and his followers as well as the monetarists and neoclassicists. Defining the natural rate of unemployment as a function of real demand and supply, Phelps referred to the 1930s dispute between Keynes and Hayek that involved the classicist and Austrian interpretations of key economic relationships. Phelps' unorthodox approach is reflected not only by his theory and attitude to neoclassical economics, the authoress says, but also by his assessment of European and American capitalism and his belief about the need for fundamental changes in economic and social policies.
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