Part 2. Nobel Prize winner for economics.

Keywords. Nobel Prize for Economics,large forces, unemployment, inflation, national savings, change policy.

Vocabulary. the Royal Swedish Academy of Sciences, macroeconomics, credit, stagflation.

A. Listen to a passage about Edmund Phelps, a Nobel Prize winner for economics.

Complete his major viewpoints below with the information you hear.

Edmund Phelps has been awarded this year's Nobel Prize for economics.

Mr Phelps is a professor of economics at Columbia University in New York City.

The Royal Swedish Academy of Sciences honored Mr Phelps for his work in macroeconomics.

That is the study of large forces that affect economies at the national or international level.

Mr Phelps correctly identified the relationship between unemployment and inflation.

Since 1930's, policy makers in many nations dealt with unemployment in the same way.

They would let inflation increase to create jobs.

For example, they would make credit easier to get, as a result, people would buy more goods.

Businesses would hire workers to meet growing demand, forcing prices up.

For many years, policy makers accepted that reducing unemployment required higher inflation.

Mr Phelps found that inflation did temporarily increase employment.

But he discovered that over the long turn, inflation hurt job creation.

His ideas were proved by economic conditions in America in the 1970's.

That period was known for stagflation, having high unemployment and high inflation at the same time.

Edmund Phelps also found that if employers expect low inflation in the future, they are more likely to hire workers.

Today, economic policy experts believe the best way to create jobs is to fight inflation.

Mr Phelps also studied national savings over long periods of time.

Common sense suggests that a very high savings rate is best.

But Mr Phelps showed that national savings rates can be too high.

He argued that saving too much limited demand in the present, which could slow growth.

The best savings rate is not so high that it limits demand in the present, and it's not so low that it limits growth and investment in the future.

Still he argued that governments should take action to raise national savings.

Edmund Phelps did much of his research in macroeconomics during the late 1960's and early 1970's.

His work continues to influence economists.

And it has helped change policy at central banks which now consider fighting inflation a main goal.

B. Listen to the passage again, this time focus on the wrong ideas and theories common people and even policy makers held before.

Supply the missing information.