Search friction: The labour market, unemployment and the macro-economy
A large part of the economy is the labor market. Not only is it, along with capital, the standard input in simple production functions, it is also a whole beast of it’s own. Just like capital is not just capital, likewise labor is also heterogenous and have unique and important issues relating to matching jobs with skills and people and time; this is what economist call search frictions. In today’s episode we discuss the 2010 prize awarded to Peter A. Diamond, Dale T. Mortensen and Christopher A. Pissarides "for their analysis of markets with search frictions". We might also offer up some dating advice based on the insights. In season 1 (Danish) we reviewed the history of economic thought before WWII. The coming seasons are dedicated to the Nobel Prize in Economics, and I am joined by economist Otto Brøns-Petersen. The Nobel prize is a good benchmark for how the field and profession of economics developed after WWII. We will focus both on the scientific contributions and on the people behind them. These are all star economists and worthy of your time and attention. Some will mainly feature in one episode, others in several. We therefore advice that you listen in the thematic order we propose – but it is up to you. Rest assured, we will cover all… Eventually.References:Links to Nobel lectures and banquet speeches:https://www.nobelprize.org/prizes/economic-sciences/2010/diamond/lecture/https://www.nobelprize.org/prizes/economic-sciences/2010/mortensen/facts/https://www.nobelprize.org/prizes/economic-sciences/2010/pissarides/facts/Berlingske article on datinghttps://www.berlingske.dk/aok/oekonomisk-teori-kan-udpege-de-faldgruber-singler-boer-undgaa-og-forklareCBS Podcast: The economics of lovehttps://cbswire.dk/the-economics-of-love/ "Job Creation and Job Destruction in the Theory of Unemployment" (with Dale Mortensen), published in the Review of Economic Studies in 1994.[15] D. Mortensen (1982), 'Property rights and efficiency of mating, racing, and related games.' American Economic Review 72 (5), pp. 968–79.