Peter Diamond is a regarded as a rare gem in the world of economics – a brilliant theorist rooted in problems of the real world. The MIT professor was yesterday awarded the Nobel Prize for Economics for his theory which helps explain the discrepancies and mismatches between employers and people seeking employment which contributes to high levels of unemployment.
Diamond, 70, was granted the award even as his nomination to the board of the Federal Reserve sits before the Senate. He shares the economics award, and $1.5 prize money with Dale Mortensen from Northwestern University and Christopher Pissarides, from the London School of Economics and Political Science.
Diamond was on his way home from the airport when he learned he had been awarded the prize, with his wife and son accompanying him. “Fortunately, I was sitting down and I wasn’t behind the steering wheel,’’ Diamond said later at an MIT press conference. “It kind of takes your breath away.’’
In April Diamond was nominated by President Obama to fill a vacancy on the board of governors at the Federal Reserve, however his appointment is being stalled. Alabama Senator Richard Shelby who is also the Republican on the Senate Banking Committee has questioned Diamond’s experience with monetary policy.
“While the Nobel Prize for Economics is a significant recognition, the Royal Swedish Academy of Sciences does not determine who is qualified to serve on the board of governors of the Federal Reserve system,” Shelby said is a written statement.
