Some personal observations on the Prize
This is a prize for the importance of economic heterogeneity and the importance of second-order effects. The cited labor market imperfections cannot be cured by reflating nominal demand, although that policy may be desirable for other reasons. Mortensen and Pissarides have an explicitly Schumpeterian approach and their work represents one version of a "recalculation" argument. (Peter Diamond in contrast does not draw out that aspect of the problem and I think of the three as each a quite different kind of economist.) You can think of Mortensen and Pissarides as providing one reason why private recalculation takes longer than is socially optimal and how this might be fixed. Their work shows how cyclical and structural phenomena operate together and must be analyzed together. In the last twenty years their work on labor markets has been much more influential, and rightly so, than traditional Keynesian approaches. Furthermore their work has dissolved the entire characterization of "Keynes vs. whomever" as out of date. Their work has much influenced my blogging on the recent employment crisis.