Three Americans, Briton awarded the 2010 Nobel economics prize

2010-10-11 18:48:30 GMT+7 (ICT)

STOCKHOLM (BNO NEWS) -- Two Americans and one Cypriot-Briton were awarded the 2010 Nobel prize in Economic Sciences on Monday for their work which explains how unemployment, job vacancies and wages are affected by regulation and policy, the Royal Swedish Academy of Sciences said.

Americans Peter Diamond, 70, and Dale Mortensen, 71, and Cypriot-Briton Christopher Pissarides, 62, were recognized "for their analysis of markets with search frictions," the Academy stated.

The trio formulated a theoretical framework for search markets that helps understand the ways in which unemployment, job vacancies and wages are affected by regulation and economic policy. Diamond analyzed the foundation of search markets, while Mortensen and Pissarides expanded the theory and have applied it to the labor market.

"One conclusion is that more generous unemployment benefits give rise to higher unemployment and longer search times," the Academy said.

Search theory has been applied to many other areas in addition to the labor market. This includes, in particular, the housing market. The number of homes for sale varies over time, as does the time it takes for a house to find a buyer and the parties to agree on the price. Search theory has also been used to study questions related to monetary theory, public economics, financial economics, regional economics, and family economics.

Diamond currently serves as an Institute Professor at the Massachusetts Institute of Technology, where he has been a member of the economics faculty since 1966. He was nominated twice by President Barack Obama, once in April and another time in September, to serve as Governor on the Board of Governors of the Federal Reserve.

However, the U.S. Senate returned his first nomination, effectively rejecting the nomination. The second nomination is still pending as lawmakers failed to approve or reject the nomination before they left to campaign for the midterm congressional elections.

Mortensen is an economics professor at Northwestern University and Pissarides is a professor at the London School of Economics.

The trio will be awarded a Prize amount of 10 million Swedish kronor (1.5 million USD) which is to be shared equally between the Laureates.

The announcement on Monday came two days after French Nobel prize winner Maurice Allais passed away at his home on the outskirts of Paris. Allais, who was 99, was awarded the 1988 Nobel prize in Economic Sciences for his pioneering contributions to the theory of markets and efficient utilization of resources.

-- © BNO News All rights reserved 2010-10-11

I guess 2 Americans + 1 Cypriot Briton = 3 Americans and 1 Briton

To the Nobel economics committee anyway.