Dale T. Mortensen

2.1. Birth and Upbringing

Mortensen was born on February 2, 1939, in Enterprise, Oregon, United States. His formative years were spent in this environment before he embarked on his academic pursuits.

2.2. Education

Mortensen commenced his higher education at Willamette University, where he earned his Bachelor of Arts (B.A.) degree in economics in 1961. He then pursued his doctoral studies at Carnegie Mellon University, completing his Doctor of Philosophy (Ph.D.) in Economics in 1967. His doctoral advisor at Carnegie Mellon was Michael C. Lovell. In May 2011, his alma mater, Willamette University, honored him with an honorary doctorate.

3.1. Professorial Roles

Mortensen joined the faculty of Northwestern University in 1965 as an Assistant Professor, a position he held until 1971. He was promoted to Associate Professor from 1971 to 1975, and subsequently became a full Professor in 1975. From 1980 until his death in 2014, he served as a Professor of Managerial Economics and Decision Sciences at the Kellogg School of Management at Northwestern University. Additionally, he held the title of Ida C. Cook Professor of Economics at Northwestern from 1985 to 2011 and was a Board of Trustees Professor from 2011 to 2014. Beyond Northwestern, Mortensen also served as the Niels Bohr Visiting Professor at the School of Economics and Management at Aarhus University in Denmark from 2006 to 2010.

3.2. Academic and Administrative Positions

Throughout his career, Mortensen held several influential academic and administrative positions. He served as the Dean of the Economics Faculty at Northwestern University from 1979 to 1982. He was one of the founding editors of the Review of Economic Dynamics and was a member of the editorial board for the American Economic Review from 1988 to 1993. Mortensen was also a past president of the Society for Economic Dynamics. His contributions to the field were recognized through various fellowships; he became a Fellow of the Econometric Society in 1979, a Fellow of the Institute of Advanced Study at Hebrew University in 1979, and a Fellow of the American Academy of Arts and Sciences in 2000. He was also a member of the American Economic Association and the Labor Economics Association.

4.1. Main Research Areas

Mortensen's research primarily focused on labor economics, macroeconomics, and broader economic theory. His work explored the complexities of how individuals and firms interact in markets, especially when information is imperfect and transactions are not instantaneous.

4.2. Search and Matching Theory

Mortensen is particularly renowned for his groundbreaking research on the search and matching theory, which addresses frictional unemployment. This theory posits that unemployment can persist even when there are many job openings because finding the optimal match between job seekers and employers is a challenging and time-consuming process. Job seekers are motivated to find better positions, while employers seek the most suitable workers, leading to a dynamic where numerous contacts are made, but perfect matches are difficult to discover quickly. His work provided a framework for analyzing these frictions in labor markets.

4.3. DMP Model

A significant outcome of Mortensen's research was the development of the Diamond-Mortensen-Pissarides (DMP) model, an influential framework for analyzing labor markets characterized by search frictions. This model, developed jointly with Peter A. Diamond and Christopher A. Pissarides, explains how the search process influences unemployment and job creation. The DMP model suggests that if unemployment benefits are sufficiently generous, unemployed individuals might take more time to search for better job opportunities, potentially leading to longer periods of unemployment. The model highlights the trade-offs involved in labor market policies and their impact on unemployment rates.

4.4. Extensions and Applications

Mortensen extended the insights from his search and matching theory to analyze various economic phenomena beyond just frictional unemployment. His work explored topics such as labor turnover and reallocation processes, the dynamics of research and development (R&D), and even the formation of personal relationships.

He also applied his economic insights to contemporary issues, including the Chinese economy. In February 2011, Mortensen commented on China's economic outlook, noting that its advantage of abundant cheap labor would not last indefinitely. He emphasized that for continued development, China needed to focus on improving worker education and technical skills, and investing in high-tech industries. He also criticized the government's wage suppression policies and suggested that incentives, such as subsidies, should be provided to encourage companies to relocate to regions with a surplus of labor to resolve labor shortages.

5.1. Nobel Memorial Prize in Economic Sciences

In 2010, Dale T. Mortensen was jointly awarded the Nobel Memorial Prize in Economic Sciences with Peter A. Diamond and Christopher A. Pissarides. The prize was bestowed upon them "for their analysis of markets with search frictions," specifically acknowledging their development of the Diamond-Mortensen-Pissarides (DMP) model, which provided a comprehensive framework for understanding how unemployment, job vacancies, and wages are determined in markets where buyers and sellers need time and effort to find each other.

5.2. Other Awards and Fellowships

Beyond the Nobel Prize, Mortensen received several other notable recognitions:

• 1965:** Alexander Henderson Award
• 1979:** Fellow, Econometric Society
• 1979:** Fellow, Institute of Advanced Study, Hebrew University
• 2000:** Fellow, American Academy of Arts and Sciences
• 2005:** IZA Prize in Labor Economics
• 2011:** Honorary Doctorate from Willamette University

8.1. Dale T. Mortensen Building

In February 2011, a building at Aarhus University in Denmark was named in his honor: the Dale T. Mortensen Building. This building serves as a central hub for all international and PhD activities at the university, housing the new PhD House, Dale's Café, the university's International Centre, and the new IC Dormitory for international PhD students. This naming signifies his lasting impact and connection to the institution, where he had served as a visiting professor.

8.2. Impact on Economic Theory

Mortensen's theoretical frameworks, especially the search and matching theory and the DMP model, fundamentally reshaped the field of economics. His work provided crucial insights into how labor markets function under conditions of imperfect information and search frictions, offering a more realistic understanding of unemployment dynamics than previous models. His contributions have been instrumental in analyzing labor turnover, job creation and destruction, and the effects of various labor market policies. The DMP model remains a cornerstone of modern macroeconomics and labor economics, widely used by researchers and policymakers to understand and address issues related to unemployment and market efficiency.