MIT Professor Peter Diamond, the newly crowned Nobel laureate for economics, predicted a slow, "painful" recovery for the US economy at his first press conference since winning the award with two colleagues.
"I think this process is going to be slow and that's painful for the whole economy and painful obviously for the people having trouble finding a job," Diamond said at the Massachusetts Institute of Technology.
On a more optimistic note, he said the economy "is very adaptive. Workers and employers adapt to what will work to make the economy function."
He also defended the widely unpopular government bailout of the country's biggest banking institutions in the wake of the financial meltdown that began in 2007.
"The bailout of the large banks, as unpleasant as it is... was absolutely essential to getting the economy going. We would have a much, much higher unemployment if it wasn't for that," he said.
Diamond, fellow American Dale Mortensen and British-Cypriot Christopher Pissarides together won the 2010 Nobel Prize in Economics "for their analysis of markets with search frictions," the Nobel jury said.
Diamond said he was still hopeful of being appointed to the board of governors of the US Federal Reserve. His nomination was blocked earlier this year in the Senate.