3 share Nobel Prize for research on jobs

NEW YORK (CNNMoney.com) -- Three economists will share the 2010 Nobel prize for their work on how government policy affects unemployment, the Royal Swedish Academy of Sciences announced on Monday.

The Nobel Prize went to Peter Diamond of the Massachusetts Institute of Technology in Cambridge, Mass.; Dale Mortensen of Northwestern University in Evanston, Ill.; and Christopher Pissarides of the London School of Economics and Political Sciences.

The three received the prize for research on how economic policy affects unemployment. Their theories "help us understand the ways in which unemployment, job vacancies, and wages are affected by regulation and economic policy," said the academy in a statement.

Earlier this year, Diamond, an expert on tax policy and Social Security, was nominated by President Obama to serve on the board of the Federal Reserve. But Sen. Richard Shelby, R-Ala., blocked the nomination, saying that Diamond didn't have the experience.

"I do not believe he's ready to be a member of the Federal Reserve Board," Shelby said in August. "I do not believe that the current environment of uncertainty would benefit from monetary policy decisions made by board members who are learning on the job."

Messages to Shelby's office and the White House were not immediately returned.

Pissarides, a British-Cypriot citizen, told the academy that he felt a "mixture of surprise and happiness" upon receiving the honor.

The three economists' research focused on so-called "frictions," or impediments to trade, such as misinformation, cost of transportation or the disparity between companies' and employees' needs.

SOURCE:

http://money.cnn.com/2010/10/11/news/economy/nobel_prize_economics/index.htm?hpt=T2