Buffet, Phelps, and Bhagwati

What would be the five most dangerous words in business?

"everybody else is doing it", Warren Buffett told managers at his Berkshire Hathaway group. - FT, Oct. 10, 2006

Edmund S. Phelps, the first solo winner of Nobel in Economics since 1999 when Robert A. Mundell, another Columbia professor was rewarded for his analysis of monetary and fiscal policy in relation to exchange rates. Both two have made and are still making trenmendous impact on today's world economy. Theory of Mundell raised the unified currency in Europe while the intertemporal tradeoffs in macroeconomic policy described by Phelps became guideline for the whole world to deal with inflation and unemployment. Phelps is 73 now and will continue teaching. "I am a workaholic," he said in Law Library yesterday.


Another Columbia professor, Jagdish Bhagwati, who was born in India, was disappointed, again. He has been one of the hottest candidate for a few years. He worked primarily on globalization and free trade. Interestingly, Phelps was also the hottest for Nobel in 2003 and 2001. Joseph E. Stiglitz, another Columbia professor, shared Nobel with George A. Akerlof and A. Michael Spence in 2001.