Edmund Phelps

Liberal redistributionists in favor of heavy taxation place less weight on incentive than do small-government conservatives.

In essence, capitalist systems are a mechanism by which economies may generate growth in knowledge - with much uncertainty in the process, owing to the incompleteness of knowledge.

In countries operating a largely capitalist system, there does not appear to be a wide understanding among its actors and overseers of either its advantages or its hazards.

I'm hoping that the administration and other thought leaders will succeed eventually in bringing the country back to the older idea that the American dream is having a career, getting a job, and getting involved in it, and doing well. That was the core of the good life.

I'm old enough to remember in the 1930s and the 1940s when thrift, frugality, was considered an important virtue.

If you rent, that's it. You don't have to pay any interest to anybody. You don't have to pay any maintenance costs to anybody. You don't have to worry about whether the boiler is going to break down. While if you own your own home, you have a hundred aggravations.

Democrats and Republicans have been very keen to make home ownership almost a national purpose.

Chancellor Angela Merkel and Wolfgang Schaeuble, her finance minister, are right to oppose fiscal and bank unions without political union.

Italy and France could lop off their excessive wealth through a one-time tax on private wealth.

The difficulties of many European countries derive from their corporatism: state projects serving cronies and vast social protection programmes, both run by elites. These surged in the 1970s and 1980s.

At the simplest level, economics can better show us the consequences of our actions. Less simple are cases in which we don't have the knowledge to predict the full consequences. Global warming and climate change are examples.

Everybody feels better about himself, his community, and his country if employers are paying workers well. Economics, though, teaches that if every employer is pressured to raise wages, some labor will be priced out of the market.

I just think that the Europeans are depriving themselves of a high-employment economy, and they are depriving themselves of intellectual stimulation in the workplace - and personal growth - by sticking to the stultifying, rigid system that I call corporatism.

When the word 'morality' comes up in connection with economics, income distribution and financial stability are usually the issues. Is it moral for rich countries to use such a high proportion of the world's resources or for investment bankers to earn large bonuses?

Unemployment rates tend to rise and fall in roughly equal proportion at all rungs of the ladder, and that happened between 1973 and 1985.

My view is that innovation has declined in the everyday processes that businesses tinker with incrementally as they try to become more productive over time.

An economy open to new concepts and novel ventures is bound to generate unequal gains.

Things can get only so bad. People want to eat, so at some point they resist further cuts to their consumption - it's not a bottomless pit.

One reason why upturns follow downturns is that downturns tend to overshoot. People get panicky, they're afraid to stay the course, so they start selling. The other thing is that I think, as entrepreneurs keep on waiting to produce new things, that there's an accumulation of as-yet-unexploited new ideas that keeps mounting up.

I don't think the economy telegraphs very clearly where it's going.

Expertise and judgment in the art of lending for novel ventures must be reacquired.

The Keynesian belief that 'demand' is always at the root of underemployment and slow growth is a fallacy.

Some economists believe that the Greeks' work ethic and thrift can pull them through. But the classical virtues can do nothing to offset the dearth of innovation that plagues the economy.

Developing new products is labour- intensive. So is producing the capital goods needed to make them. These jobs disappear when innovation stalls.

The epic story of the West is the development in the 19th century of a mass prosperity the world had never seen and its near-disappearance in one nation after another in the 20th.

I grew up, until age 6, in Chicago. My parents rented their apartment and, at the end of the Depression, my parents wanted to replicate that situation. So, again, we lived in a somewhat suburban setting outside of New York City, and again, they rented.

I grew up thinking that renting is perfectly normal. And then, strangely enough, I never did buy a house. I live in New York City, and I'm still renting. My own personal narrative shows that it is possible to live a respectable life without ever having owned a home.

I'm not attacking the idea that people live in conglomerations of houses in proximity to one another, sharing the same water mains and the same newspaper delivery boy and so forth. I'm not objecting to that. That could happen with or without homeownership.

The celebration of homeownership seems to be part of a countermovement against popular owning of shares in corporations.

Entrepreneurs' willingness to innovate or just to invest - and thus create new jobs - is driven by their 'animal spirits,' as they decide whether to leap into the void.

Germany, Italy and France appear to possess less dynamism than do the U.S. and the others.

The level of dynamism is a matter of how fertile the country is in coming up with innovative ideas having prospects of profitability, how adept it is at identifying and nourishing the ideas with the best prospects, and how prepared it is in evaluating and trying out the new products and methods that are launched onto the market.

An indictment of entitlements has to focus on the huge 'social wealth' that the welfare state creates at the stroke of the pen. Yet statistical tests of the effects of welfare spending on employment yield erratic results.

Corporatist attitudes against capitalism came to the fore in the 1920s. Corporatists, with their conservative values, hated the invasion of towns and regions by new businesses, upsetting traditional ways, wealth and status.

What brought mass innovation to a nation was not scientific advances - its own or others' - but 'economic dynamism': the desire and the space to innovate.

Mass prosperity came with the mass innovation that sprung up in 1815 in Britain, soon after in America, and later in Germany and France: It brought sustained growth to these nations - also to nations with entrepreneurs willing and able to copy the innovations.

After a major loss of dynamism in the 1960s, productivity growth rates began dropping in most countries, falling by half in the U.S. in the 1970s and more or less ceasing altogether in France, Germany and Britain in the late 1990s.

To prosper and advance, the American business sector is going to need a financial system oriented toward business, not 'home ownership.'

I would like to see people dreaming of striking out on their own into some other country or their own, wherever they feel the action is, in the hope of an exciting and rewarding career.

Narrow banks could restart effective intermediation and ensure that consumers and employment-creating small and medium-size enterprises are adequately financed and can contribute to the reactivation of the economy.

The need to encourage entrepreneurship and ensure that young people have the opportunity to start new businesses is acute.

Economics has paid a terrible price for its dalliances with the Keynesian and neoclassical theories.

The fallacy of the neoclassicals is their tenet that total employment, though hit by shocks, can be said always to be heading back to some normal level.

To pump up consumer or government demand would force interest rates up and asset prices down, possibly by enough to destroy more jobs than are created.

There would be plenty of justification to raise revenues in order to subsidize businesses that employ low-wage workers. But there can be no justification for pandering to the economy's entire bottom half merely to attract its votes.

Without being aware, I think I was being indoctrinated into what was called Vitalism, the idea that what makes life worth living, the good life, consists of accepting challenges, solving problems, discovery, personal growth, personal change.

My God, I don't know anyone who likes to accumulate their wealth more than the Europeans.

Entrepreneurs have only the murkiest picture of the future in which they are making their bets, and also there is ambiguity: they don't know when they push this lever or that lever that the outcome is going to be what they think it is going to be - there is the law of unanticipated consequences.

Companies like Google and Facebook may offer jobs allowing or requiring imagination and creativity, but the whole of Silicon Valley accounts for only 3 percent of national income and a smaller percentage of national employment.

The good life, as it is popularly conceived, typically involves acquiring mastery in one's work, thus gaining for oneself better terms - or means to rewards, whether material, like wealth, or nonmaterial - an experience we may call 'prospering.'