The Diamond-Mortensen-Pissarides model, named after this year's three economics prize winners, helps answer questions like why so much unemployment exists in spite of so many job openings.
Nevertheless, Tore Ellingson who sat on this year's economics prize committee, insists that this year's decision had nothing to do with the current economic crisis. "Absolutely not. We operate on other time-scales than current economic events." He added, "It's where the research frontier is, not where the news is."
The laureates' theories help explain the ways in which unemployment, job vacancies, and wages are affected by regulation and economic policy, according to a press release from the economics committee.
The economics prize is the only one of the six prize categories that Alfred Nobel did not establish it in his will, so it is not actually a Nobel prize, even though it is generally considered to be one. During the late 1960s, Sweden's central bank established the prize in memory of Nobel, awarded annually in Stockholm.