Since the 1970s a gulf has
opened between the pay of low-paid
workers and the pay of the middle class. No longer able to earn a
decent wage in respectable work, many have left the labor force, and
the job attachment of those remaining has weakened. For Edmund Phelps,
this is a failure of political economy whose widespread effects are
undermining the free-enterprise system. His solution is a graduated
schedule of tax subsidies to enterprises for every low-wage worker they
employ. As firms hire more of these workers, the labor market would
tighten, driving up their pay levels as well as their employment. 
Macroeconomics would not be what it is today without
Edmund Phelps.
This book assembles the field's leading figures to highlight the
continuing influence of his ideas from the past four decades.
Addressing the most important current debates in macroeconomic theory,
it focuses on the rates at which new technologies arise and information
about markets is dispersed, information imperfections, and the
heterogeneity of beliefs as determinants of an economy's performance.
The contributions, which represent a breadth of contemporary
theoretical approaches, cover topics including the real effects of
monetary disturbances, difficulties in expectations formation,
structural factors in unemployment, and sources of technical progress.
Based on an October 2001 conference honoring Phelps, this incomparable
volume provides the most comprehensive and authoritative account in
years of the present state of macroeconomics while also pointing to its
future.
The fifteen chapters are by the editors and by Daron Acemoglu, Jess Benhabib, Guillermo A. Calvo, Oya Celasun, Michael D. Goldberg, Bruce Greenwald, James J. Heckman, Bart Hobijn, Peter Howitt, Hehui Jin, Charles I. Jones, Michael Kumhof, Mordecai Kurz, David Laibson, Lars Ljungqvist, N. Gregory Mankiw, Dale T. Mortensen, Maurizio Motolese, Stephen Nickell, Luca Nunziata, Wolfgang Ochel, Christopher A. Pissarides, Glenda Quintini, Ricardo Reis, Andrea Repetto, Thomas J. Sargent, Jeremy Tobacman, and Gianluca Violante. Commenting are Olivier J. Blanchard, Jean-Paul Fitoussi, Mark Gertler, Robert E. Hall, Robert E. Lucas, Jr., David H. Papell, Robert A. Pollak, Robert M. Solow, Nancy L. Stokey, and Lars E. O. Svensson. Also included are reflections by Phelps, a preface by Paul A. Samuelson, and the editors' introduction.
Edmund Phelps's
[book]...is likely to shake the establishment. For
while much of what the Columbia University economist (now working at
the Russell Sage Foundation) has to say about the 'natural' rate of
unemployment has been alluded to before, his ambitious explanation of
long-term joblessness may serve as a license for intervention in an
area where fatalism has long been fashionable.
This
book comprises
the text of the first series of Ryde lectures, established by Lund
University in Sweden. It offers a broad survey of various macroeconomic
topics which feature prominently in research as well as theoretical and
policy debate. An authoritative, comprehensive summary and original
critique of modern macroeconomic approaches, the book reviews one
school of economic thought in each chapter: Keynesian; monetarist; New
Classical school; New Keynesian school; supply side macroeconomics;
"non-monetary" models of macroeconomics; and real business cycle theory
and the "structuralist school."