Three economists won a 2010 Nobel Prize for developing a theory based upon "markets with search frictions" to explain why people remain unemployed despite plenty of job vacancies.
For non-economists like me (and like most everyone reading this blog), I can't begin to understand "markets with search frictions."
Thankfully ... Justin Lahart and Jason Lee, from the Wall Street Journal, explain this with simple text and simple visuals. I found the following worthy of a just-created 2010 Novel Piece Prize for Luminance in Economic Explanation.
"Peter Diamond on Monday shared the Nobel memorial prize in economies for research into the difficulty buyers and sellers face in finding each other and how that can disrupt a marketplace. The laureates showed that such 'search frictions' can lead to increases in unemployment, despite classic models of supply and demand.
For example, if your inability to sell your house keep s you from taking a job elsewhere, that can have an outsize effect on the job market. In a seminal 1982 paper, Mr. Diamond used a strikingly simple parable to illustrate the point — a parable that applies to today's unemployment problem." [source: Wall Street Journal, Oct. 16, 2010]
Congratulations Justin and Jason on being 2010 Novel Piece Prize winners for Luminance in Economic Explanation.