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After five years of slow recovery from the Great Recession and a recent jobs report that showed persistently slow growth, it is natural to wonder whether the labor force has deep structural problems. AEI hosted Nobel Prize–winning economist Peter Diamond on Monday to discuss new research on the causes underlying high unemployment and how the US can address this issue. He argued that the primary cause of unemployment remains the weak economy, and that stimulating the economy may be necessary to improve the function of the labor market.
Although the overall unemployment rate may be elevated because of the weak economy, Diamond argued, the issue of the long-term unemployed poses a unique problem to policymakers, as the long-term unemployed are especially difficult to return to work. AEI's Kevin Hassett and the Center for Economic and Policy Research's Dean Baker each concluded that the long-term unemployed may require more specific policies to return to their pre-recession well-being.
America’s persistently high level of unemployment is one of the greatest challenges facing policymakers in the wake of the Great Recession. Is this unemployment crisis a product of normal business cycle activity, or does it stem from a structural problem in the labor force?
Join AEI for a presentation by Nobel Prize–winning economist Peter Diamond, who will discuss research on the causes of the current unemployment crisis and the implications for policy design.
If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.
Peter Diamond, Massachusetts Institute of Technology
Dean Baker, Center for Economic and Policy Research
Kevin A. Hassett, AEI
Michael R. Strain, AEI
For more information, please contact Emma Bennett at [email protected], 202.862.5862.
For media inquiries, please contact [email protected], 202.862.5829.
Dean Baker is codirector of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and was an assistant professor at Bucknell University. He has also worked as a consultant for the World Bank, the Joint Economic Committee of the US Congress, and the Organisation for Economic Co-operation and Development's Trade Union Advisory Council. Baker has written several books; his latest is “The End of Loser Liberalism: Making Markets Progressive” (Center for Economic and Policy Research, 2011). He also writes a weekly column for The Guardian and Huffington Post and his blog, Beat the Press, features commentary on economic reporting. His analyses have appeared in many major publications, including The Atlantic, The Washington Post, the London edition of the Financial Times, and The New York Times.
Peter Diamond is an Institute Professor Emeritus at the Massachusetts Institute of Technology, where he taught from 1966 to 2011. He has served as a founding member and president of the National Academy of Social Insurance as well as on several consulting panels to the Advisory Council on Social Security and as the president of the American Economic Association. Diamond was awarded the Nobel Memorial Prize in Economic Sciences in 2010, along with Dale T. Mortensen and Christopher Pissarides, for his work in analyzing search frictions in markets. He is a research fellow at the CESifo Group and National Bureau of Economic Research and an affiliated researcher with the Center for Retirement Research at Boston College. His research has focused on a broad range of issues, including the role of search processes in the economy, public finance and Social Security systems, fiscal policy, and behavioral economics. His books include “Saving Social Security: A Balanced Approach” (Brookings Institution Press, 2005, coauthored with Peter R. Orszag), “Reforming Pensions: Principles and Policy Choices” (Oxford University Press, 2008, coauthored with Nicholas Barr), “Pension Reform: A Short Guide,” (Oxford University Press, 2009, coauthored with Nicholas Barr), and “Behavioral Economics and Its Applications” (Princeton University Press, 2012, edited with Hannu Vartianinen).
Kevin A. Hassett is the director of economic policy studies and the John G. Searle Senior Fellow at AEI. Before joining AEI, he was a senior economist on the board of governors of the US Federal Reserve System, an associate professor of economics and finance at Columbia Business School, and a policy consultant to the US Department of the Treasury during the George H. W. Bush and Clinton administrations. He served as an economic adviser during the George W. Bush 2004 presidential campaign, as chief economic adviser to Senator John McCain during the 2000 presidential primaries, as senior economic adviser during the McCain 2008 presidential campaign, and as economic adviser to the Mitt Romney 2012 presidential campaign. Hassett also writes a column for National Review.
Michael R. Strain is a resident scholar at AEI. His academic research papers and policy papers study labor economics, applied microeconomics, and public finance. His work has appeared in the Journal of Money, Credit, and Banking; Tax Notes; and National Review, among other publications. Before joining AEI, he was the manager of the New York Census Research Data Center and an economist with the Center for Economic Studies at the US Census Bureau. Previously, he was a member of the research group of Census's Longitudinal Employer-Household Dynamics Program and worked in the macroeconomics research group at the Federal Reserve Bank of New York.