Dale T. Mortensen, the Ida C. Cook Professor of Economics at Northwestern University's Judd A. and Marjorie Weinberg College of Arts and Sciences, is one of three winners of the 2010 Nobel Prize in Economics.
The other winners are Peter Diamond, Massachusetts Institute of Technology, and Christopher Pissarides, London School of Economics and Political Science in the United Kingdom.
The three economists will share a total prize of $1.5 million.
The prize recognized “their analysis of markets with search frictions,” the Royal Swedish Academy of Sciences said.
The three developed a framework that seeks to explain why there are so many people unemployed at the same time as there are a large number of job openings.Their model helps explain the ways in which unemployment, job vacancies, and wages are affected by regulation and economic policy and can also be applied to other areas including the housing market.
"This is a great honor for Professor Mortensen and for Northwestern and a recognition of the important research that is being done at the University. On behalf of the entire Northwestern community, I extend my congratulations to Professor Mortensen," said Northwestern University President Morton Schapiro.
Mortensen pioneered the theory of job search and search unemployment and extended it to study labor turnover, research and development, personal relationships, and labor reallocation. His insight, that friction is equivalent to the random arrival of trading partners, has become the leading technique for analysis of labor markets and the effects of labor market policy. The development of equilibrium dynamic models designed to account for wage dispersion, the time series behavior of job and worker flows, and the role of reallocation in the determination of aggregate growth and productivity are the principal topics of his current research. His publications include over fifty scientific articles. His book, “Wage Dispersion: Why Are Similar Workers Paid Differently?,” was published by MIT Press in 2003.
One of Mortensen's co-winners, Peter Diamond, was the winner of the first Edwin Plein Nemmers Prize in Economics, which is awarded annually by Northwestern University to a leading figure in economics. Diamond received the Nemmers Prize in 1994. Diamond is the fourth recipient of the Nemmers Prize to subsequently be awarded the Nobel Prize in Economics.
Mortensen is the second current or former faculty member of Northwestern's Department of Economics to receive a Nobel Prize in Economics. Roger B. Myerson, who received a Nobel in economics in 2007 while a professor at the University of Chicago, was a member of Northwestern's economics department from 1976-2001. It was during that time that much of his Nobel-winning research was conducted.
The Nobel Prize in Economics was established by Sweden's Riksbank in 1968 to mark the central bank's 300th anniversary. The prize is awarded annually for "work of outstanding importance" in the field of economic science and the winners are selected by the Royal Swedish Academy of Sciences.
"All of us at Northwestern University are thrilled that Professor Dale Mortensen, a member of our faculty in the Department of Economics since 1965, has received this year's Nobel Prize," said Northwestern University Provost Daniel Linzer. "Dale's many contributions in his scholarship are matched by his long record of excellence in teaching and service at Northwestern. We extend our congratulations to Dale, and to his colleagues and students."