In 2006, Phelps is awarded the Nobel Prize in Economics “for his analysis of inter-temporal tradeoffs in macroeconomic policy". According to the Nobel Prize committee, he has "deepened our understanding of the relation between short-run and long-run effects of economic policy."

In 1962/63, he spends a year at MIT.

He spends a year at the Center for Advanced Study in Behavioral Science at Stanford University (1969-1970).

In 1966, Phelps moves to the University of Pennsylvania as a professor of economics. There he focuses on the link between employment, wage setting and inflation. This research includes the role of expectations and imperfect information in the setting of wages and prices. He introduces the concept of the natural rate of unemployment and argues that labor market equilibrium is independent of the rate of inflation, thus there is no long run tradeoff between unemployment and inflation.

In 1951, he enters Amherst College, Massachusetts with a major in economics. Humanities courses, especially those on philosophy, make a deep impression on him. He gains his BA in 1955.

In 1971, Phelps moves to Columbia University. There he publishes research on the impact of fiscal policy on optimal inflation. He broadens his horizons, working in Europe – mainly France and Italy – during the 1980s and in Moscow in 1990, where he and Kenneth Arrow design a proposal for the reformal of the USSR. In 2001 he and Roman Frydman found the Center on Capitalism and Society to promote and conduct research on capitalism.

Phelps works a little more than a year as an economist for the RAND Corporation (until summer 1960).

He moves to Yale, where he receives his PhD in 1959.

Edmund Phelps is born in Evanston, Illinois, on July 26, 1933.

In 1974 Phelps marries Viviana Montdor from Buenos Aires, a translator fluent in 4 languages. Viviana brings two children, Monica and Eduardo, to their marriage. Now the couple has seven grandchildren.

Then he takes a research position at the Cowles Foundation, while also teaching at Yale. In 1961 he publishes his Golden Rule savings rate: This is the rate of savings which maximizes steady state level or growth of consumption.

He grows up and attends high school in Hastings-on-Hudson, New York.