STOCKHOLM, October 12, 2010 (AFP) – Three labour market experts, including one blocked for a top post at the US Federal Reserve, won the 2010 Nobel Economics Prize Monday for research that has had an impact on employment reforms worldwide. The Nobel jury said the work of Peter Diamond and Dale Mortensen of the United States and British-Cypriot Christopher Pissarides helped resolve puzzles such as why people remained unemployed despite a large number of job openings.
It lauded the three economists “for their analysis of markets with search frictions,” which helps explain how unemployment, job vacancies and wages are affected by regulation and economic policy.
Such labor analysis was likely a primary factor in President Barack Obama’s decision early this year to nominate Diamond to one of seven seats on the Federal Reserve’s board of governors and its Federal Open Market Committee, which sets US interest rate policy.
Diamond, 70, is widely considered a world authority on labor analysis.
But Senator Richard Shelby, Republican of Alabama, blocked his nomination in August, saying he did not think his background was “ideally suited for monetary policy.
Speaking in Cambridge, Massachusetts at the Massachusetts Institute