325_Supplement3

325_Supplement3 - Department of Economics University of...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Intermediate Macroeconomic Analysis Spring 2011 1 Department of Economics University of Maryland Economics 325 Intermediate Macroeconomic Analysis Supplement 3 Professor Sanjay Chugh Spring 2011 The following article, published in the October 16, 2010 issue of the Economist , discusses the work of the recipients of the 2010 Nobel Prize in Economics, Peter Diamond, Dale Mortensen, and Christopher Pissarides. Their work laid the foundations of “search theory,” a framework of market activity that enriches in intuitively-plausible and empirically-testable ways the basic supply-and-demand framework on which virtually all of economic analysis is based. The core ideas of search theory are that it takes time and effort (“search costs”) for individuals to locate, apply to, interview for, and ultimately begin suitable work, and it takes time and costs and effort (“recruiting costs”) for firms to advertise jobs, screen applicants, and ultimately hire workers. If the ideas sound “obvious,” it is partly because search theory has shaped how economists and policy-makers (and thus indirectly citizens) think about labor markets since the 1970’s and 1980’s, when the so-called “Diamond-Mortensen-Pissarides” theory of labor markets, was first developed.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Intermediate Macroeconomic Analysis Spring 2011 2 Economics focus Search and employ This year’s Nobel prizewinners owe their award to insights into how people find jobs Oct 14th 2010 TWO coconut trees grow on the veranda of the Chitradurga employment exchange in India’s Karnataka state, where Kalandar Khan, a young member of the state civil service, holds jobs fairs and recruitment rallies. A snapshot on his mobile phone shows the veranda thronged with potential applicants fo
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This document was uploaded on 11/01/2011 for the course ECON 325 at Maryland.

Page1 / 5

325_Supplement3 - Department of Economics University of...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online