Nobel Prize for Economics

Tuesday, October 12, 2010

Catherine Rampell, economics editor at, discusses the economics behind the Nobel Prize awarded to Peter Diamond, Dale Mortensen and Christopher Pissaride.


Catherine Rampell

Comments [4]


Isn't the "Nobel Prize in Economics" a misnomer?

Oct. 12 2010 11:47 PM

Brian: "... unemployment [is at] 10% or more, if everyone who should be counted was counted ..."

This aside underscores a fundamental illusion, perhaps delusion, about our unemployment "debate": The true unemployment number--if so-called discouraged workers, people who have simply given up looking after looking for a long time, through no medical etc. reason, were counted--is closer 15-16%. Figure in high school graduates etc. who can't find work but haven't previously been counted as part of the labor market, and the number is closer to 20%. That's **one-fifth** of the available workforce that's not working---one in five people.

This **real** number is barely ever mentioned by reporters, pundits, policy makers, etc. Until it is a routine and standard part of these discussions, it will be *impossible* to genuinely deal with unemployment.

Oct. 12 2010 10:50 AM
Phil Henshaw from way uptown

It's unfortunate, that the story on the Nobel prize for Economics leaves out what causes the "labor market friction" being talked about.

The real subject is not being mentioned, that people are unable to change their income levels, homes, knowledge and cultural places in the world as fast as ever accelerating job changing requires. So, the story is really about how experts have decided that the solution is to find how to push people to adapt faster, than they really know how. That is the "market friction" that is being discussed....’

My observation is not political, but from a sound scientific view. That approach to reducing labor market friction between people loosing jobs and the jobs that might be available for them, will NOT enable people to change jobs ever faster as our labor market is requiring. That's the problem. What happens if you try to is create panic, with people more inclined to mutiny than cooperate, as we also now see in a variety of emerging political movements around the world.

I'm not saying that all practical ways to relieve the symptom are bad. I'm saying that relieving the symptoms in now way addresses the really bad idea of guaranteeing prosperity with ever more rapid change, the standard model of endless growth.

The root problem of endless growth is that we are creating conditions of increasingly non-adaptive change, which I could outline further if you wished to discuss it. I wrote my first paper on the approach of this very condition, still quite valid in it's overall assessment, over 30 years ago. With accelerating change you naturally exceed the learning response time of the parts, and that's what we're doing world wide.

Oct. 12 2010 10:38 AM

Have the researchers addressed the gap between market research and community research? How do they address the intersection of diverse market structures?

Oct. 12 2010 10:26 AM

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