The unemployment story has many mansions, and this book owns one of them. It analyzes unemployment as a search-and-match-mediated equilibrium of flows through the labor market, set in motion by job destruction and job creation. The new edition adds endogenous job destruction and on-the-job search to the story, and can fairly claim to tell you everything you always wanted to know about search unemployment, but didn't know whom to ask.
Robert M. Solow, Institute Professor of Economics, emeritus, MIT
Pissarides incorporates imoprtant new developments into equilibrium unemployment theory. A particularly important development is endogenizing job destruction as well as job creation into a unified theoretical framework. This framework, along with new data on job and worker flows, promises to provide a better understanding of unemployment.
Edward C. Prescott, Universities of Chicago and Minnesota
Pissarides provides the labor-market building blocks for the new macroeconomics. A must read for everyone in macro and labor.
Bob Hall, Hoover Institution, Stanford University
Christopher Pissarides provides a definitive introduction to the search model of the labor market. The revised model, in dispensing with money and deriving real interest rates from real considerations, reveals itself to be a full subscriber to the natural-rate theory of unemployment. Among the several additions, the new chapter endogenizing job destruction is particularly valuable.
Edmund Phelps, McVickar Professor of Political Economy, Columbia University