Three Economists, Including Ex-Fed Chair Bernanke, Win Nobel for Work on Bank Crises

The Nobel Memorial Prize in Economic Sciences was awarded on Monday to Ben S. Bernanke, the former Federal Reserve chair, and two other academics who have helped to reshape how the world understands the relationship between banks and financial crises.

Douglas W. Diamond, 68, of the University of Chicago, and Philip H. Dybvig, 67, of Washington University in St. Louis — two economists who created a seminal model that explained the dynamics of bank runs and financial meltdowns — won the prize alongside Mr. Bernanke, 68, who is now at the Brookings Institution in Washington.

The three economists won for a body of work that stretches back into the 1980s. Their research has delved into different aspects of how banks become vulnerable to upheaval, how bank failures worsen and extend financial disasters, and how the system might be made safer in light of those risks.

These findings have repeatedly proved relevant to real-world policy, with central bankers drawing on their lessons in 2008 during the financial meltdown and in 2020 when markets seized up at the start of the pandemic. Those policymakers included Mr. Bernanke, who was the Fed chair from 2006 to 2014.

Article source: https://www.nytimes.com/2022/10/10/business/nobel-prize-economics-winner.html