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American Receives Nobel for Economics

The Royal Swedish Academy of Sciences announced the winner of the 2006 nobel Prize for Economics on Monday. Edmund Phelps of the United States won the prize, worth about $1.3 million. Phelps` research involves the interplay between prices, unemployment and inflation expectations. He won the award for work he has done in the 1960s that challenged an assumption that policy-makers could target either low inflation or low unemployment, but not both.

Phelps, 73, teaches at Columbia University in New York. He said of winning the award: "It feels better and better as it begins to sink in that I have won this wonderful award. It`s great." His research of macroeconomics has made the field clearer, as he described how in setting prices and negotiating wages, employers and workers make judgments about future inflation that in turn influence the inflation outcome.

Following the previous Nobel award winners announced earlier this week, only Americans have won so far. The prize, in memory of Alfred Nobel, will also be granted in two other categories. The distinguished Nobel for Literature award will be announced on Thursday, and the week will be sealed with the Peace Laureate announcement on Friday.