Christopher A. Pissarides

by on October 11, 2010 at 8:57 am in Economics | Permalink

See my Mortensen post for his work with Mortensen, which encompasses some of his most important contributions.  He teaches at LSE and his home page is here.  His Wikipedia page is here.  A brief bio is here.  His CV is here and he was born in Cyprus as a Greek Cypriot.  Here are some working papers.  

Here is Pissarides on Google Scholar.  Here is his book on equilibrium unemployment theory.  He has a very good paper on hysteresis and how originally short-term unemployment can worsen and persist.  He emphasized that point in today's phone interview.

Here is his 2003 paper praising British labor market policy:

Unemployment in Britain has fallen from high European-style levels to US levels. I argue that the key reasons are first the reform of monetary policy, in 1993 with the adoption of inflation targeting and in 1997 with the establishment of the independent Monetary Policy Committee, and second the decline of trade union power. I interpret the reform of monetary policy as an institutional change that reduced inflationary expectations in the face of falling unemployment. The decline of trade union power contributed to the control of wage inflation. The major continental economies failed to match UK performance because of institutional rigidities, despite low inflation expectations.

For the contrast with the Continent, see here and here.

Of the three winners, I think of Pissarides as the least Keynesian of the trio. This is a big victory for "not just Keynesian" visions of the labor market and macroeconomics more generally. Garett Jones called this a prize for "relationship macro" and it also can be said that sophisticated versions of real business cycle theory are alive and well.

Here is his very good 2009 Econometrica piece on wage stickiness, abstract:

I study the cyclical behavior of an equilibrium search model with endogenous job creation and destruction, with focus the model’s failure to match the observed cyclical volatility of unemployment. Job creation in the model is influenced by wages in new matches. I summarize microeconometric evidence on wages in new matches and show that the key model elasticities are consistent with the evidence. Therefore explanations of the unemployment volatility puzzle have to preserve the cyclical volatility of wages. I discuss some extensions of the model that can increase cyclical unemployment volatility through mechanisms other than wage stickiness.

1 Chris R October 11, 2010 at 5:20 am

I think that this all goes to show that in 2010, the old labels of 'Keynesian' and 'New Classical' do not make any sense as applied to the younger members of the economics profession. There are some holdouts from 1978-era Keynesianism and new Classicism; Bob Gordon and Ed Prescott come to mind. Political debate ends up falling back to 1978 levels but that's because thinking about anything dynamic (like the present value of taxes or the option value of being employed) is genuinely difficult.

2 JBJ October 12, 2010 at 3:20 am

MR one year ago: "Mortensen and Pissarides are sometimes mentioned in the context of future Nobel Prize winners."

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