Who are Douglas Diamond and Philip Dybvig, Winners of the Nobel in Economics?

This topic — how banks work, and how they can slip up, causing broad problems — continues to be relevant. In a video posted in 2019 by the Center for Economic Policy Research, Mr. Diamond described how, just before the financial crisis, there was a drastic increase in the number of loans that did not include covenants to help ensure the money would be paid back.

Researchers, he said, were looking into “why, in a boom period, just before the crisis,” was there so little incentive to be careful.

Mr. Diamond, who was born in 1953, has taught at the University of Chicago since 1979. “His research agenda for the past 40 years has been to explain what banks do, why they do it and the consequences of these arrangements,” the university said in a statement.

As an undergraduate he attended Brown University, earning a bachelor’s degree in economics, followed by master’s and doctorate degrees in economics at Yale.

He continues to teach at Chicago’s Booth School of Business, including a graduate course in corporate finance. He has previously taught as a visiting professor at the M.I.T. Sloan School of Management, the Hong Kong University of Science and the University of Bonn.

Article source: https://www.nytimes.com/2022/10/10/business/diamond-dybvig-model-nobel-economics.html