By LOUISE NORDSTROM and KARL RITTER
Associated Press Writers
STOCKHOLM – Two Americans and a British-Cypriot economist won the 2010 Nobel economics prize Monday for developing a theory that helps explain how many people can remain unemployed despite a large number of job vacancies.
Federal Reserve board nominee Peter Diamond was honored along with Dale Mortensen and Christopher Pissarides with the 10 million Swedish kronor ($1.5 million) prize for their analysis of the obstacles that prevent buyers and sellers from efficiently pairing up in markets.
Diamond – a former mentor to current Federal Reserve chairman Ben Bernanke – analyzed the foundations of so-called search markets, while Mortensen and Pissarides expanded the theory and applied it to the labor market.