Lessons from Nobel Prize-winner Edmund Phelps

Congratulations, Professor Phelps!" We barged into the room, each grinning madly as we paused in front of our teacher, stopped to shake his hand, shook our heads in awe, and then slowly settled into our seats. Most of us held copies of that day’s New York Times article with Phelps’ picture, embarrassingly planning to get the copy signed after class.

Barely having enough time to catch his breath, Professor Phelps was besieged by an onslaught of questions. "What was it like, winning the Nobel Prize?"

I knew that this was to be no ordinary lecture.

"I’m happy. It was not so much that I really wanted to get it. But I did not want not to get it. Economics is a funny thing. I’ve always told friends that the work I do is important, and whether they believed me or not, I do not know. But now that I’ve won the Nobel Prize, the argument will be laid to rest." Professor Phelps smiled. He, too, knew that the class dynamic would be different from then on.

The day before, I was in my tiny dorm room, chatting with my Auntie Carolyn – my favorite source for updated news on family and otherwise.

"Sten, congratulations to Columbia. Nobel Prize in Economics just announced. It went to Edmund Phelps," wrote Carolyn Sy to me.

"Ahhh. Wait. Whaaaaaaaat? Seriously? He’s my teacher in economics!" came my reply

I turned on the radio, and true enough, the most recent Nobel Prize winner was being announced on National Public Radio: "American Edmund Phelps won the 2006 Nobel Memorial Prize in economic sciences on Monday for his analysis of short-run and long-run trade-offs in macroeconomic policy. He received the award on his own, breaking the recent pattern of awarding the prize jointly to two or more winners. The 73-year-old Columbia University professor’s work showed how low inflation today leads to expectations of low inflation in the future, thereby influencing future policy decision- making by corporate and government leaders. The economics prize, worth the equivalent of $1.4 million, is the only one of the awards not established in the will left by Swedish industrialist Alfred Nobel a century ago."

A few minutes later, I was receiving phone calls left and right from my classmates as thrilled as I was about the news.

How cool is this? He won the Nobel while we were in his class! This has so made our year! But we’re losing a teacher to Stockholm in December!

There were roughly 15 of us in Professor Phelps’ class. Great for us students since we have direct contact and interaction with our teacher. However, not a great sign for a supposedly infamous professor, who should have had at least more than 40 students knocking on his door to sign up for the class. But my excitement at being in this particular class started way before the Nobel Prize was awarded. I’m not a die-hard economics fan, and for me to wake up each morning and actually want to attend class with a crazy, 25-page list of books to read says something about the teacher. I’ve had good, great and horrible teachers in my lifetime. It would be unfair to place Phelps into any one of these categories, it being only two months into the semester. Nevertheless, I have been on a high, knowing that I am being taught by one of the best, whose theories and research have greatly impacted policy and contributed to society.

I’ve been told time and time again that we go to school not to get a degree, but to get an education. Never has this point so clearly struck home. In class, all thoughts about job market prospects, doing well on exams, and catching up on homework disappeared from my head. Professor Phelps, who has never come to class with a structured lesson plan in sight, speaks straight from experience and his dealings with other respected people in his field – Jeffrey Sachs and Joseph Stiglitz, to name a few. Theories and calculations fade into matters of less importance, as Phelps’ words weave vivid pictures of economies of days past. Phelps, educated at Amherst College and Yale University, dedicated his entire life to the world of economics. His passion shows, and rubs off on all of us fortunate enough to be under his tutelage.

All this in a man with such a dignified, yet humble, presence. Phelps, who owns neither house nor car, has lived in the same place for the past two decades. He is no stranger to humor, either. A few days after winning the prize, Phelps approached us, worried about how our class would be affected by his absence in December. We asked him about what the perks of his new title would bring, and he laughingly said, "They assigned me a new TA to mark your papers. I’d give you a take-home final exam, but then I wouldn’t have the pleasure of knowing what’s inside your heads, would I?"

After the Nobel Prize winner for literature, Orhan Pamuk, was announced, Phelps came up to us and commented that he was glad that Columbia University had two back-to-back Nobel laureates in the community, but he jokingly commented in a somber tone, "I was wishing that the literature prize would go to John Updike. I would have wanted to meet him."

Our university president Lee Bollinger sent out an uplifting e-mail message to everyone connected to the school, stating his pride in Phelps’ well-deserved honor. "When someone in your community wins a Nobel Prize everyone feels a lot better. The truth is we all feel a little bit smarter. It gives us enormous satisfaction and pride. His achievement – the result of a remarkable work ethic and passion for ideas – serves as a model for future generations who strive to make a difference at the crossroads of what we know and still hope to know." Bollinger was not alone in his approval of the Prize selection. News reports had mentioned Professor Cowen and Berkeley Professor Brad DeLong, both describing the choice of Phelps as a good selection, while Harvard Professor Gregory Mankiw called it "a wonderful choice."

Phelps ended a press conference in school with a promise to continue teaching, despite his newfound fame and wealth. "I’m a workaholic," he said. And I, for one, am glad, for no amount of reading will replace face-to-face education with the Master.

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For more questions or suggestions, email me at stephaniecoyiuto@yahoo.com or visit my website at www.stephaniecoyiuto.com.