Your Majesties, Your Royal Highnesses, Ladies and Gentlemen.

My co-winners, Peter Diamond and Christopher Pissarides, and I wish to thank the Royal Swedish Academy of Sciences and the Nobel Foundation for this very great honor. We each feel privileged and humbled to be named the winners of the 2010 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

Economics is a strange science. Our subject deals with some of the most important as well as mundane issues that impinge on the human condition. Our own study of how the labor market works and the role of unemployment in it provides the perfect example.

Studs Terkel, a fellow Chicagoan, was noted as an American oral historian as well as a famous character about town. In his book entitled Working: People Talk About What They Do All Day and How They Feel About What They Do, he sums up his interviews with the following observation: “For these people … work was a search, sometimes successful, sometimes not, ‘for daily meaning as well as daily bread’…” Although labor income is by far the largest component of gross national product, a job is not just a commodity. For many, work is an important reason for living. Even for those who are less fortunate in their allocation of work, being unemployed is a miserable state. These facts add to the reasons for supporting the income of the unemployed during this recession and restoring prosperity as soon as possible.

The three of us are honored to be singled out. However, I am reminded of Isaac Newton’s great quote, “If I have seen further it is only by standing on the shoulders of giants.” This sentiment better than any other underscores the fact that science is a collaborative endeavour. Every great achievement is but a small peak in the mountain range of contributions. With this thought in mind, I close by thanking our teachers who played an essential role in our intellectual development, our colleagues who collaborated with us along the way, and our families who supported our adventures.