in the 1980s professor phelps worked with european universities and institutions, such as banca d'italia (most of his 1985-86 holidays were spent in italy) and observatoire français des conjonctures économiques (ofce). he became interested in the continuing high unemployment in europe and published some work about it with jean-paul fitoussi (the director of ofce). during the next years, professor phelps worked to calculate the natural rate of unemployment. he published some of his research in a 1994 book. phelps also worked with luigi paganetto at the university of rome tor vergata and, between 1988-98, they held the villa mondragone international seminar.