A UK-based Cypriot and two Americans have won the 2010 economics Nobel for work focusing on problems like unemployment.
The Royal Swedish Academy of Sciences said yesterday the 10 million Swedish crown (around €1.0 million) prize recognised Christopher Pissarides and U.S. professors Peter Diamond and Dale Mortensen.
Their work included analysis of the process of buying and selling and how job vacancies and wages are affected by regulation and policy.
“According to a classical view of the market, buyers and sellers find one another immediately, without cost, and have perfect information about the prices of all goods and services… But this is not what happens in the real world,” the prize committee said in a statement.
On the labour market, the laureates’ models help understand how unemployment, job vacancies and wages are affected by regulation and economic policy, including the size of jobless benefits, the committee said.
Their theories can also be applied to housing markets, as both vacancies and the time to sell a home vary over time. The citation said Diamond had analysed the foundations of search markets while Mortensen and Pissarides had expanded the theory and applied it to the labour market.
The economics prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968. It is not part of the original group of awards set out in dynamite tycoon Nobel’s 1895 will.
Pissarides has made a name for himself for his work on job flows and unemployment. From his research he has concluded that the more eagerly job seekers look for work, the more jobs companies are likely to offer because it will be easier to fill them.
He has also found that faster productivity growth increases the demand for labour and reduces, rather than increases, unemployment. Productivity growth also draws more labourers into the workforce.
Born in Cyprus in 1948, Pissarides gained a BA in Economics in 1970 and MA in Economics in 1971 at the University of Essex. He subsequently enrolled at the London School of Economics (LSE), where he received his PhD in Economics in 1973. He is currently professor of economics at the LSE and holder of the Norman Sosnow Chair in Economics.
He has written extensively in professional journals and his book “Equilibrium Unemployment Theory” is a standard reference in the economics of unemployment.
He is also a research fellow at the Center for Economic Policy Research in London and the Institute for the Study of Labor in Bonn, as well as being a member of the Monetary Policy Committee of the Central Bank of Cyprus.
Short interview with Christopher Pissarides see:
