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Nobel economics prize awarded to three

11 October 2010 14:56 (UTC +04:00)

Baku - APA-Economics. Peter Diamond, Dale Mortensen and Christopher Pissarides shared the 2010 Nobel Prize in Economic Sciences for their work on the efficiency of recruitment and wage formation as well as labor-market regulation, BusinessWeek reported.

The laureates â€œhave formulated a theoretical framework for search markets,â€ the Royal Swedish Academy of Sciences said in a statement today. â€œPeter Diamond has analyzed the foundations of search markets. Dale Mortensen and Christopher Pissarides have expanded the theory and have applied it to the labor market. The laureatesâ€™ models help us understand the ways in which unemployment, job vacancies, and wages are affected by regulation and economic policy.â€

Pissarides, 62 -- an economics professor at the London School of Economics -- made his reputation through his work on job flows and unemployment. He related job creation to the number of unemployed, the number of vacancies and the intensity with which workers look for jobs and companies recruit applicants. The more eagerly job seekers look for work, the more jobs companies are likely to offer because it will be easier to fill them, according to Pissarides.

Mortensen, 71 -- a professor at Northwestern University -- pioneered the study of how workers search for jobs. He found that labor-market rigidities can cause unemployment as job- seekers look for the best work at the highest pay. The intensity of that job search determines how long workers stay unemployed and in turn can be affected by changes in the level and duration of jobless benefits.

Diamond, 70 -- an economics professor Massachusetts Institute of Technology -- has researched a wide range of subjects. His earliest work, published in the 1960s, focused on the long-term impact of the growing national debt on the economy.

The awardâ€™s official name is The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. The money, 10 million kronor ($1.5 million), a gold medal and a diploma, will be handed out to the laureate at a Stockholm ceremony on Dec.10, the anniversary of Nobelâ€™s death.

â€œWhy are so many people unemployed at the same time that there are a large number of job openings?â€ the Academy Sciences wrote in the statement today. â€œThis yearâ€™s laureates have developed a theory which can be used to answer these questions. This theory is also applicable to markets other than the labor market.â€

The 2009 economics prize was awarded to Elinor Ostrom, the first woman to win, and Oliver Williamson for research into the limits of markets and how organizations work. Krugman won the prize in 2008 â€œfor his analysis of trade patterns and location of economic activity,â€ the academy said at the time.