And the Nobel goes to…

I hate to say I-told-you-so, which means it’s a good thing I’m often wrong. This year’s prize in economics goes to Diamond, Mortensen, and Pissarides for their work on search theory, and in particular understanding the ‘frictions’ (econ-speak for anything that gets in the way of perfect competition)  that appear to drive labor (and other) markets.

Diamond was my [secondary] advisor as a grad student at MIT, so I’m very happy for him — congratulations Peter! I also did my very best to impersonate him at the annual grad student skit party during my first year, accompanied by a bottle of now-extinct Double Diamond beer. He had a soft-spoken Mr Rogers style of teaching, but his tests and grading could be brutal (albeit fair), so several of the older students told me that my performance brought back anxious memories. On his behalf, I’ll take that as a compliment.