Monday, October 11, 2010

Nobel Prize in Economics

The final Nobel Prize announcement each year is economics - that happened just now. The winners of the 2010 economics Nobel Prize are Peter A. Diamond, Dale T. Mortensen, Christopher A. Pissarides. Tyler Cowen at Marginal Revolution is posting about each of these guys: Their common link is search models in labour markets, and search theory more generally.

If you're seeking a British angle on this, Pissarides is at the LSE and is British-Cypriot. The other two are American. All of them promote ideas relating to something we'll learn about next term in macroeconomics: Frictional unemployment. People often change jobs, and this doesn't happen instantaneously, hence some of the unemployment at any given time will be frictional as people search for jobs. Once they find a job they are matched.

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