My former colleague Peter Diamond, along with Dale Mortenson and Chris Pissarides, has won the Nobel. Richly deserved. The prize is for work on frictions in markets, which is very important stuff; but Peter, an incredibly profound thinker, has done much much more.
And yes, this is the same Peter Diamond whose nomination to the Fed board has been held up because of Republican doubts about his qualifications.
Here's Krugman's earlier post on the blocking of Diamond:
Peter Diamond, Macro Maven This is disgusting: Senate Republicans holding up Peter Diamond's nomination to the Federal Reserve Board on the grounds that he may not be qualified to make monetary policy. Aside from the fact that the same Senators cheerfully confirmed Bush nominees who didn't know much about economics of any kind, this is especially stupid right now.
Why? Because right now one of the hot topics is whether the apparent shift in the Beveridge curve signals a rise in structural unemployment - and Diamond wrote the seminal paper on the whole subject - the top result on Google scholar.
Diamond is exactly the man we need - which, given the way things have been going lately, probably means he won't get confirmed.
Update: Some commenters note, correctly, that there's an ongoing dispute over what the rise in vacancies without a corresponding fall in unemployment means. But that's precisely the point: we want Peter Diamond, who pioneered the whole study of this subject, in the Fed, where he can help make sense of the situation.
But there's really not that much new about this. Republicans have long had contempt for science, and for the Nobel Prize (whether or not you count economics as a "science"). All that's different now is that they fillibuster everyone in sight. But the Nobel prize is purely an incidental matter so far as that's concerned.
Diamond, Mortensen, Pissarides Share Nobel Prize (Update1) . By Rich Miller and Toby Alder
Oct. 11 (Bloomberg) -- Peter A. Diamond , Dale Mortensen and Christopher Pissarides shared the 2010 Nobel Prize in Economic Sciences for research into the difficulties of matching supply and demand, particularly in the labor market.
"This year's three Laureates have formulated a theoretical framework for search markets" such as ones where buyers look for sellers and applicants look for jobs, the Royal Swedish Academy of Sciences, which selects the winner, said today in Stockholm.
Diamond, 70, is a Massachusetts Institute of Technology professor and a candidate for the Federal Reserve Board whose nomination has been held up by Senate Republicans. Pissarides, 62, teaches at the London School of Economics, and Mortensen, 71, is on the faculty at Northwestern University.
"Peter Diamond has analyzed the foundations of search markets," the academy said. "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."
Search theory tries to explain such conundrums as how high unemployment can be accompanied by a large number of job openings. One conclusion is that more generous jobless benefits lead to higher unemployment as those who are looking for work take longer to find it, the academy said.
Right now, the conservative/GOP line is that unemployment is high because millions of people lazy good-for-nothing slobs all at once decided they'd just rather not work, thank you. And as part of their evidence they point to supposedly otherwise inexplicable gaps in employment. Diamond is the Man when it comes to explaining such things, as this Nobel Prize now fully confirms. Since having a rational explaination is the last thing Republicans want in this situation, winning the Nobel Prize makes him even less attractive a nominee than ever before.
If we just let Obama be Obama, he will announce the withdrawal of Diamond's nomination tomorrow.
