LSE professor Christopher Pissarides was awarded the Nobel Prize for Economic Sciences today.
He won the 2010 prize jointly for his work on the economics of unemployment, especially job flows and the effects of being out of work. He shares the prize with Peter Diamond from Massachusetts Institute of Technology and Dale Mortensen from Northwestern University.
Announcing the new laureates, the Nobel Committee said the award was for analysis of markets with search frictions.
Professor Pissarides is professor of economics at LSE and holder of the Norman Sosnow Chair in Economics. He is also a fellow of the Centre for Economic Performance at LSE and of the Centre for Economic Policy Research. He was awarded his PhD at LSE in 1973 and has been on the faculty since - for 38 years.
Professor Pissarides said he was initially speechless on winning the award and would need to time to absorb the news.
He said: 'Our research looks at what happens to someone who loses his or her job because of changes in economic environment. We have created a model which allows us to analyse the processes and decisions, such as policy, which affect how long it is before someone finds productive employment again. Until we began the work there was no way of thinking about these issues.
'One of the key things we found is that it is important to make sure that people do not stay unemployed too long so they don't lose their feel for the labour force. The ways of dealing with this need not be expensive training - it could be as simple as providing work experience.'
LSE director Howard Davies said: 'I offer my warmest congratulations to him. The Nobel committee clearly felt, as we do, that his work over many years has been of outstanding quality and relevance and the whole LSE community will want to salute his achievement.'
Professor John Van Reenen, director of the Centre for Economic Performance, said: 'I am delighted that Chris has been recognised for his outstanding work in understanding how markets really work. Rather than assuming that workers were being smoothly and instantaneously matched with jobs as in traditional models, he elegantly modelled the process by which both sides are constantly on search for opportunities to find the right match. These "frictions" matter substantially for our understanding of movements between jobs and unemployment. They are not mere analytical inconveniences but fundamental to our analysis of aggregate unemployment and business cycles.'
This award takes the number of Nobel prize winners who have been students or teachers at LSE to 16.
Read the Nobel Prize announcement here
For the list of Nobel Prize winners connected to LSE, click here
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Interview with Professor Pissarides on the Nobel Prize website
Christopher Pissarides is professor of economics at LSE and holder of the Norman Sosnow Chair in Economics. He specialises in the economics of unemployment, labour-market theory, labour-market policy and more recently he has written about growth and structural change. He has written extensively in professional journals and his book Equilibrium Unemployment Theory, now in its second edition, is a standard reference in the economics of unemployment. In 2009 he is serving as vice president of the European Economic Association, to become president elect in 2010 and president in 2011.
He has served as head of the Economics Department at LSE, and he is an elected fellow of the British Academy, the Econometric Society, the European Economic Association and the Society of Labor Economists. He is also a member of Council of the European Economic Association and the Econometric Society and a former member of Council of the Royal Economic Society. He is the chairman of the Economica board, and a member of other editorial boards, a research fellow of the Centre of Economic Performance at LSE (and a former head of its Macroeconomics Research Programme), of the Centre for Economic Policy Research (London), and of the Institute for the Study of Labor (IZA, Bonn). He is also a Non-National Senior Associate, Forum for Economic Research in the Arab Countries, Iran and Turkey and a former member of the Monetary Policy Committee of the Central Bank of Cyprus (2000-2007). He has served on the European Employment Task Force (2003) and he has been a consultant on employment policy and other labour issues for the World Bank, the European Commission, the Bank of England and the OECD.
In 2005 he was awarded the IZA Prize in Labor Economics (jointly with Dale Mortensen) for his work on unemployment and in 2008 he received the Republic of Cyprus "Aristeion" for the Arts, Literature and Science.
Professor Pissarides is 62. He has two children, Antony, 23 and Miranda, 21.
11 October 2010