Monday, October 11, 2010
Nobel Prizes in Economics
This year's Nobel Prizes in Economics went to Peter Diamond, Dale Mortensen, and Christopher Pissarides, for their work on the economics of search. Excellent choice! This work has been highly influential. Diamond developed an early Keynesian coordination failure model in a search framework, and the Mortensen-Pissarides model has become a workhorse in labor economics and in modern macroeconomics, changing entirely how we think about labor markets. Search has also been used extensively in monetary economics, at least since the late 1980s. It's hard to imagine what economic research would look like today without the work of Diamond/Mortensen/Pissarides.