Economics Nobel 2010 for Diamond, Mortensen and Pissarides

October 11, 2010 13:15

Economics Nobel 2010 for Diamond, Mortensen and Pissarides

by Amar Yumnam
The recent and still prevalent global financial meltdown has definitely drawn the attention of both the economists and the policymakers to macroeconomic issues. In Macroeconomics, we study the issues and problems concerning the economy as a whole instead of the behaviour of single individuals and firms; the latter is the issue for Microeconomics. In the global concern with the financial meltdown, attention has been focussed on contributions of economists working in macroeconomic areas. One perennial issue of this branch is the issue of unemployment. The biggest issue of the current global economic slowdown is the widespread unemployment, particularly in the developed countries of the west.
It must be this concern with the massive unemployment in the western countries which has weighed in the mind of the Nobel Committee to award this year’s prize to three economists working on labour theory, a core sub-branch of Macroeconomics. Peter Arthur Diamond of the Massachusetts Institute of Technology, Dale Thomas Mortensen of the Northwestern University at Illinois and Christopher Antoniou Pissarides of the London School of Economics have been jointly awarded this year’s prize. Diamond has had professional association with two front-ranking institutes for research in Economics, the Massachusetts Institute of Technology itself and the University of California at Berkeley. Though Chicago University beats others in numbers, winning Nobel Prize in Economics is not a new thing for the Massachusetts Institute of Technology of which Paul Samuelson is one of the first winners of the prize. The institute’s current faculty has some young scholars who would be claimants to the prize in the years to come; look out for Ester Duflo in this connection. Dale Thomas Mortensen of the Northwestern University is a doctoral product of Carnegie Mellon University. Unlike Diamond he does not have career association with the big names of departments for study of Economics. In fact, of the three winners, he is the least widely known. Christopher Antoniou Pissarides of the London School of Economics is a Cyprus born. He has his academic association with the University of Essex and the London School of Economics itself. He is a student of another famous macroeconomist Michio Morishima under whom he worked for the doctoral degree at the London School of Economics. The London School of Economics, LSE as it is generally known, must be elated now for, despite the size of the department and the prestige associated with the name, its share in the list of Nobel Prize winners is very poor indeed.
The three economists are among the pioneers who evolved an approach to merge the two branches of economics, Microeconomics and Macroeconomics, in what is known in the literature as the study of microfoundations of macroeconomics. In this the contributions of other Nobel economists, like Kenneth Arrow and Joseph Stiglitz, on information theory and search costs have definitely been foundations for their contributions. In fact, this is the most common thread binding the three winners of this year. Diamond has worked extensively, particularly in recent years, on social security and pension issues. Of the three, Mortensen and Pissarides are genres of the very contemporary approach in macroeconomics where the long run issues are not characteristically different from the short run ones, an approach where the traditional distinction between business cycles (short run phenomenon) and growth (long run phenomenon) disappears.
For everything there is a cost; “

October 11, 2010 13:15
  • NVSN Murthy, RESEARCHER

    Norinomics (Life & Economics Humanized)
    A New Economic Philosophy with a Human Face
    (MY contribution to MY people of MY planet)

    An easy route to eliminate economic crisis:
    De-linking of economy from economics is the simplest solution to economic crisis, if any, think it over.

    Measures for stable economy:
    Insulate, do not isolate, economy and economics from GDP, Sensex, Forex and Inflation. This ensures stable economy and also helps in speedy and effective recovery from economic crisis, if any, think it over.

    Economy:
    Happiness of the people is the real economy of a nation and all other things are traps.

    Economics:
    The mechanism that makes the people happy is called economics.

    Misapprehensions:
    GDP, Forex, Sensex and Inflation are not the elements of economy; therefore they cannot measure the economy of a nation.

    Economic policies:
    Evaluate first, then adopt and finally adapt since economics is a subjective subject with objectives subjective and role-sensitive.

    Inflation:
    Inflation is the market-exaggerated disproportion in the production, distribution and consumption of goods, services and wealth. Therefore, this planning-sensitive element is not a relevant parameter for effective assessment of the economy of a nation since the imbalances disappear either by planting preventive measures or timely corrective actions or permanently installed system controls for timely actuation of precisely installed regulators.

    Economist:
    Agriculture is the epicenter of economy, thus, no nation can survive if its farmer is suffering since agriculture and the mechanics of economics are the two reactants rigidly controlling and producing the final product generally being referred to as “Economy”, which too, is directly proportional to the speed at which a nation moves its men, material and money and, is accurately measurable for specifying its index by an economist who has sensibly blended fundamentals with commonsense and constantly qualifying himself as a precise tool for the intended job.

    Real asset value of a nation:
    Money in circulation is the real asset value of a nation since it is the only asset working for the nation, hence, the higher the better.

    Bedrocks of economic growth:
    Fair play, benefit-balancing and cooperation are the keystones that accelerate economic growth, disturbing them destroy nations.

    Numbers & Digits:
    Economists not isolating economy and economics from numbers and digits destroy their nations.

    Wealth:
    Wealth can neither be created nor destroyed, but it transforms into several forms and possesses enormous potential to alter the dynamics of economics, its misplacement or displacement causes proportionate degree of imbalances in the economy of the nation.

    Money:
    Money accumulation does not mean wealth acquisition since money seldom measures the strength of a nation or individual, more so, yellow metal.

    Cooperation:
    Cooperation is the orthocenter of economy and is directly proportional to the need and inversely proportional to the greed of the nations. Nations necessarily viewing cooperation as basic necessity become all-time rich.

    Farmer’s Role:
    Politicians in power seldom comeback to power by ignoring farmer, politicians aspiring power seldom come to power by ignoring farmer, political parties ignoring farmer do not survive.

    Protect sanctity of economics:
    Economics becomes Agonymics if self removes economics from social science and merges it with politics to suit. If it happens, economics no more deals with production, distribution and consumption of goods, services and wealth.

    Mystery of Economics:
    Unlike science, engineering and mathematics – economics can be poured into any vessel of any shape or size. This is the simplicity and fluidity of this volatile subject and the same is the complexity too, thus, the so-called turbulence.

    Invasion:
    If we invade the fundamental theories & principles of economy and economics, these vital topics become no more understandable.

    Cause of economic crisis:
    We are adding confusion and complicating economics and economy for supplementing and complementing our interests.

    Cost of Nothing:
    Nothing is free in this world since everything comes from nothing; similarly, nothing is free in this world even though everything comes from nothing.

    Cost of Price:
    Since everything comes from nothing, the initial cost of everything is zero, as the value adds up, so does the price.

    Nation’s Health:
    Wealth is not a measure of nation’s health.

    Speed Means Growth:
    The economic growth of a nation is directly proportional to the speed at which the nation moves its men, material and money. However, safety and cost-effectiveness are vital considerations.

    Wear:
    Wear is the single largest employer of our world. Also, it is the biggest controller of economy and economics of our world.

    Change:
    Only a change can change a change and change alone can challenge a change along with the inevitable uncertainties associated with every change. These are the real challenges of life for the present and future generations.

    Uncertainties:
    Uncertainty is more certain and more inevitable than the most inevitable change and challenges. Thus, entrepreneurs must be more vigilant than never before since emerging technologies demanding abrupt changes need abnormal potential to absorb changes and challenges associated.

    Governance:
    Business is not the business of the government. Therefore, nations must not involve in any commercial activity since their only business is governance, policy making, administration, safety and security of the people, food and health security, draught and flood control, conservation of wildlife and forests, pollution and inflation control, infrastructure development, environmental protection, public service, standardization, rationalization and simplification of rules, regulations and procedures.

    Source of smiles:
    Good people give smiles, other give tears.

    Life:
    Life is uncertain because death is certain.

    Distribution of Strength & Stamina:
    God gives strength to men and stamina to women.

    Truth:
    We seldom seek truth since we are comfortable with facts.

    God:
    God is universal. So, He is not different for different people. If God is different for different people, HE is no more a God.

    Ideas:
    Ideas are more valuable than ideologists since every idea is a spontaneous overflow of powerful feelings and carries the potential to change the world.

    Rules:
    If rules are not simpler, bitter will be the result.

    Decisions:
    Woman knows where the shoe pinches most; therefore their involvement is vital in decision-making process.

    Impossibilities:
    Nothing is impossible since impossibilities are time-sensitive and person-sensitive; therefore, let us continue to chase for solutions.

    Failures:
    Willing to fail puts life on positive mode, unwilling to fail causes distress, disease and death.

    Nothing:
    No one has the potential of doing nothing since doing nothing is unachievable, but the dead can do it, thus, impossibilities are not only time sensitive, person-sensitive, position-sensitive and place-sensitive, but also, state-sensitive. This is called “Nori Sensitivity Theory / Nori State Theory (NST)”.

    Tomorrow:
    Tomorrow is not there for animals and other forms of life that are wiser than human beings. For reasons best known to us, we did not buy this philosophy and therefore, we became unwise. Thus, we started acquiring things for tomorrow ignoring the fact that tomorrow’s existence and its availability to us is entirely in the hands of tomorrow. Finally, we must realize a fact that tomorrow is only in the hands of tomorrow; whereas, today is in our hands, therefore, let us contribute something today instead of waiting for tomorrow.

    Savings:
    If I am saving something for tomorrow, I am depriving someone who needs it today (.) Saving something for tomorrow is depriving someone who needs that something today.

    Postponement:
    Do it today since tomorrow is too late for a good job.

    Spending:
    We need to save something for a rainy-day which is bound to come to all of us, one day or the other.

    Words:
    Words have no meaning of their own since they are subjective and thus, user-sensitive. Hence this world is a battle field for definitions.

    Remuneration:
    The more you give, the more you get – both remuneration and satisfaction.

    Nature (The Greatest Teacher on Earth):
    Nations adopting nature’s laws become healthy.

    Nori’s Global Peace Pill:
    Do not do for others what you do not want others to do for you.

    Inseparables:
    Body and pain, pain and gain, body and soul, day and night, light and heat, noise and vibration are inseparables. Therefore, do not waste time for this.

    Inevitables:
    Failure and success are like day and night, ignore them and strive for stability.

    Statics and Dynamics:
    Be dynamic since nothing on earth is static, including earth.

    Cause & Cure of Death:
    Death means unwillingness to change.

    Our World:
    Mad people think others are mad, others think the other way round. No one knows who is really mad since everyone is mad in his own way – this is the real beauty of our wonder world wonderful enough to keep life going in a wonderfully wonderful manner.

    Love:
    Love loves the love lovely; the love loved by love loves the love lovely and lovingly.

    Progress:
    Working against nature is unnatural and abusive, therefore – work along with nature since nature is the greatest teacher with principles as rigid as rigid can be.

    Use:
    Misuse and abuse are inevitable for things that are in use.

    Composition of life:
    God fills life with little satisfaction and large dissatisfaction.

    Hidden World:
    This is a hidden world since everyone is hiding something.

    Talent:
    Talent gives competency, cleverness gives success.

    Perfection:
    Never aim at perfection because it is not there.
    No one is perfect since everyone is perfecting imperfection.
    Perfection is nowhere since imperfection is being perfected everywhere.

    Excellency:
    Consistency is better than Excellency.

    Misunderstanding:
    We often misunderstand because it is easy to do so.

    Underperformance:
    We under-perform since we undermine learning.

    Luxuries:
    Lust for luxuries lessens life on earth.

    End result:
    We do not become best by doing our best; we become best only by doing what is required.

    Bends in life:
    A bend on the road is not a bend in the life.

    Nationality:
    Humanity is a better tag than nationality.

    Oneness:
    Oneness is better than own-ness.

    Godliness:
    Humanity is the manifestation of godliness and godliness is the visible form of the invisible humanity and help is the final product form.

    Wisdom:
    Commonsense is the essence of all kinds of knowledge and wisdom, thus the scarcity.

    Madness:
    Everyone is mad since no one is glad.

    Togetherness:
    Let us live together since we came alone and go alone.

    Curiosity:
    Curiosity causes creativity, create it.

    Satisfaction:
    Satisfy with earning, not with learning.

    Studentship:
    Be a student as long you live, this ensures success.

    Learning:
    Self-teaching is the best way of learning.

    Bad Learner:
    A poor listener is a bad learner and a very bad earner.

    Study Campus:
    Campus qualifies to learn outside, pursue it.

    Study Results:
    Results mostly come from off-the campus learning, promote it.

    Time Sharing:
    Spare time to share with others.

    Inventors:
    Inventors may be mad, not inventions.

    Welcome Ideas:
    Welcoming ideas means inviting inventions, knowledge, progress and prosperity since a closed mouth cannot catch flies.

    Problems in progress:
    Snubbing ideas means shrinking progress and prosperity. We can snub people, not their ideas.

    Commonsense:
    Commonsense is the essence of all kinds of knowledge available to human beings on earth. Therefore, commonsense has become the most uncommon commodity on earth ever since the birth of earth. Unfortunately this priceless commodity is becoming more and more uncommon day-by-day, therefore due to its unavailability, we seldom apply this priceless commodity to solve problems of life.

    Friction:
    Friction is responsible for industrial and population growth.

    Every day is a turning point:
    Every day we turn a day, whether we work or not.

    Teamwork:
    No team is strong since a weak man is there in every team. Obviously, failure takes place through the least path of resistance.

    Origin of life:
    Life originates from friction and fluids.

    Progress on earth:
    Progress of any kind is impossible without friction and fluids; wear is the single largest controller of economy and economics of our world. It directly affects individuals, institutions, organizations and nations.

    Purity:
    Nothing on earth is pure since nature believes in doping.

    Purpose of life:
    The purpose of life is not only to live, also to support other lives.

    Brain robbery:
    Brain robbery is the biggest crime since it involves physical, mental, financial, virtue and morality loss.

    Love your society:
    Life without love for others is not a life, it something untold by life.

    Professional ethics:
    Buy ideas, do not copy, also, discourage copying.

    Service to humanity:
    There is God in every genuine needy, help him to serve Him.

    Live to Love:
    Life is not for living; it is for loving (human life, animal life & plant life).
    Certainty of life:
    In life, nothing is more certain than death.

    Qualification of work:
    A qualitative work does not qualify to work.

    Quality Work:
    A quantified work is a quality work.

    Adjectives:
    Adjectives in reports adjourn decisions, omit them.

    Do only one thing at a time:
    God gave us two eyes to see only one thing at a time, two ears to listen to only one thing at a time, two hands to do only one thing at a time and, two legs to reach one destination at a time. Therefore – the right way of doing many things at a time is to do only one thing at a time.

    We get what we deserve most:
    We cannot give anything to anyone, at the most, we can deliver something to someone granted by HIM and, HE gives us credit for delivering things granted by HIM.

    Effect of Failures:
    Failure seeds philosophy, changes psychology, imparts maturity and releases poetry.

    Life’s live mode:
    Live, don’t remain alive since the purpose of life is to live, not to stay alive.

    Problems of life:
    Man created money and made it powerful too, thus the problems.

    Remuneration:
    Remuneration is for efforts and results, not for qualification or knowledge.

    Knowledge gained by people:
    Knowledge, if not delivered, disappears / undelivered knowledge vanishes.

    Importance of people on earth:
    No one becomes important unless and until someone gives it.
    We become important only when others give us importance.

    Seeds of progress:
    Wise men prefer to wear-out since they believe that – it is better to wear-out than to rust-out. Unless we dissatisfy with the things around, we do not think of something better, thus the achievement of betterment is achieved since – there is always a best way of doing things even it were to boil an egg.

    Performance Standard:
    Aiming at quality without achieving consistency is absurd. Never discuss quality since the term “quality” is a relative term, not an absolute one. Quality of goods and quality of persons is one and the same since both insist reliability and dependability.

    Ruling cultures:
    Rules rule the negative minds; service rules the positive ones.

    Time is the genuine witness:
    Time tells truth since it is the biggest enemy to all liars and afraid of none.

    Cost of omissions:
    We omit errors and invite mistakes and thereafter blunders, finally we give excuses.

    Philosophy:
    It needs an out-of-the-box imagination to understand philosophy.

    ————————————

    In economics, the majority is always wrong – John Kenneth Galbrait
    Without effort, qualification & talent seldom produce innovations … NVSN Murthy
    We can’t solve problems by using the same kind of thinking we used when we created them …. Albert Einstein
    The energy of mind is the essence of life… Aristotle
    Innovation is the central issue in economic crisis …. Michael Porter
    All our knowledge has its origin in our perceptions … Leonardo da Vinci
    Commonsense is instinct, enough of it is genius … George Bernard Shaw
    Knowledge has to be improved, challenged, and increased constantly, or it vanishes … Peter F. Drucker
    Special request: Please forward this document to all your friends, relatives, colleagues, seniors, juniors, bosses, students, teachers, general public, public servants, politicians, Senates, Governors, NGOs, charity organizations, policy makers, economists and government authorities.

    ————————————————

    My undying commitment and passion for Economy, Economics, Humanity, Society, Writing, Global Oneness, Peace, Progress, Women & Child Welfare and Poverty Alleviation has produced “Norinomics” by yielding the above strenuous observations.

    Thus, every quotation becomes an ageless and priceless invention unlike technological inventions that go outdated one day or the other.

    Sincerely,

    • NVSN Murthy, A temporary visitor on earth serving people and nations as an Independent Researcher, Age: 58, Earthman (Indian), Religion: Peace, Nationality: Humanity.

    • A passing visitor on earth melting hearts and merging people through humanity and friendship for causing peace, progress, prosperity and happiness to people and nations since life on earth is a one-time gift of GOD and hence, certainly worth living without causing and inviting tears.

    Current address: Indian Soil
    Present address: Planet Earth
    Past address: Unknown
    Future address: Unknown

    Request:
    Your esteemed award to Norinomics will attract many
    towards creative writing for a common cause.

    Season’s Greetings & Best Wishes
    for a Happy New Year 2011.
    May God bless the people and all other forms of life on earth
    with health, happiness, friendship, openness, oneness,
    humanity, peace and progress.