A Carnegie Mellon University graduate today was named one of three winners of the Nobel Memorial Prize in Economic Sciences.
Dale Mortensen, 71, an economics professor at Northwestern University in Evanston, Ill., shared the honor with two others for developing a theory that helps explain why many people can remain unemployed despite a large number of job vacancies.
Mortensen earned a doctorate degree from Carnegie Mellon in 1967. He is the 18th faculty or alumnus from Carnegie Mellon to win a Nobel, according to the university.
"We're extremely proud of the heritage we have here at Carnegie Mellon," said Nicolas Petrosky-Nadeau, assistant professor of economics at CMU.
Today's other winners were Peter Diamond, 70, an economics professor at Massachusetts Institute of Technology and a Federal Reserve board nominee, and Christopher Pissarides, 62, an economics professor at the London School of Economics.
The laureates "have formulated a theoretical framework for search markets," the Royal Swedish Academy of Sciences said in a statement. "Peter Diamond has analyzed the foundations of search markets. Dale Mortensen and Christopher Pissarides have expanded the theory and have applied it to the labor market. The laureates' models help us understand the ways in which unemployment, job vacancies, and wages are affected by regulation and economic policy."
Said Petrosky-Nadeau: "These three people are what really brought the study of job creation to the forefront."
Mortensen found that labor-market rigidities can cause unemployment as job-seekers look for the best work at the highest pay. The intensity of that job search determines how long workers stay unemployed and in turn can be affected by changes in the level and duration of jobless benefits. …