Few middle-of the night phone calls let some people know that they've entered the hallowed halls of Nobel Laureates

American Edmund Phelps took the 2006 economics Nobel on Monday for work in the 1960s on the link between unemployment and inflation that economists say shapes the way central banks formulate monetary policy today.

The Royal Swedish Academy of Sciences said the Columbia University professor won for challenging the assumption that cutting interest rates or taxes would give only a short-term boost to employment and create higher inflation down the road.

Deepening the Nobel jury says our understanding of the relation between short-run and long-run effects of economic policy a decisive impact on economic research

Phelps, called the "economist's economist" by his colleagues was Born on July 26, 1933, in Illinois. Phelps has worked as a professor of economics at Columbia University in New York since 1982.Since 2001, he has also been the director of the Center on Capitalism and Society at Columbia's Earth Institute.

Owning neither a house nor a car, the laureate suggested to reporters that his own lifestyle doesn't quite fit economic theory. But he said he realised quite quickly on Monday morning what the call was about.

"Well, once my wife woke me up and said that I had an international call and I looked at the clock and I saw it was a few minutes after six ... so ... and I knew it was Monday ... so those were all clues that maybe it was Stockholm calling."

The award comes at a time in Sweden as in other industrialised countries Phelps' work is at the centre of a vast debate on structural reforms as industrialized countries attempt to restructure their economies to bring down unemployment and control inflation, while also containing deficits and debt, all amid a need to fund future pension and health-care systems.

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