THERoyal Swedish Academy of Sciences has today also awarded the Nobel Prize for Economics 2022: the beneficiaries are three Americans who have distinguished themselves for research on banks and financial crises: Ben Bernanke, Douglas W. Diamond e Philip H. Dybvig.
The three economists “have greatly improved our understanding of the role of banks in the economy, especially during the financial crises, and how to regulate i financial markets”, reads in motivations of the Prize. Their research “reduces the risk that the financial crises they turn into long-term depressions with serious consequences for society".
Ben Bernanke, who is the new Nobel Prize in Economics 2022?
The new Nobel Prize in Economics Ben Bernanke, “the father of quantitative easing” was Fed chairman from February 2006 to February 2014 during the presidencies di George W. Bush e Barack Obama and in his academic career he devoted much attention to the study of the Great Depression of the 30s. "Well Bernanke, in an article of 1983, demonstrated, with statistical analyzes and historical sources that the ran to the counters they brought to bank failures and that this was the mechanism that turned a relatively ordinary recession into the depression of the thirties, the most dramatic and serious crisis we have seen in modern history,” he said John Hassler, member of the committee for the Nobel Prize in Economics. Bernanke was at the forefront of the big one financial crisis between 2007 and 2008 related to subprime mortgages and to the failure of Lehman Brothers. In that context, he launched a series of extraordinary operations to purchase government bonds, reduce the cost of money and inject liquidity.
Between 2008 and 2014, the assets in the hands of the Fed went from a thousand to about 4 trillion dollars (now over 8.000 as a result of the operations adopted during the pandemic). Born in 1953 in Augusta, Georgia, he graduated in economics from Harvard in 1975 and subsequently specialized at MIT in Boston. He has taught at Princeton, New York University and MIT itself.
Diamond and Dybvig: the creators of the technical model to explain the "bank run"
Diamond and Dybvig, together, they gave the name to the famous theoretical model which aims to explain the ways in which a bank run phenomenon is determined (bank run), while providing a theoretical representation of the mechanism by which the banks create liquidity. The model represents to date the landmark theory for the explanation of the phenomena and it is no coincidence that various successive reformulations have been proposed. The theory was confirmed by the dynamics that emerged with the collapse of Lehman Brothers.
"The central banks are able to defeat inflation, we often forget a lesson from Milton Friedman that central bank monetary policy works with a time lag,” he said Douglas Diamond, called in real time fromRoyal Academy of Sciences during the press conference for the awarding of the prize. “However,” Diamond said, “part of the problem is i deficit very large all over the world: monetary policy and fiscal policy must work together”. Diamond stressed that the global financial system today "is much better prepared" for the eventuality of a financial crisis than it was in 2008.
Douglas Diamond: Who is the Nobel Prize in Economics?
Born in 1953, Douglas W. Diamond teaches at Chicago Booth University and specializes in the study of financial and liquidity crises. He graduated from Brown University in 1975 and then specialized at Yale.
Who is Philip H. Dybvig?
Dybvig was born in 1955 and teaches at Washington University in St Louis after having held a professorship at Yale.
Nobel Prize in Economics 2022: the almost 900.000 dollar prize will be awarded in December
I three winners they will share the prize from 885.000 dollars and will be delivered in a ceremony to be held on 10th December. Unlike the other prizes, the one for economics was not established in Alfred Nobel's will of 1895, but by the Swedish central bank in his memory. The first winner was selected in 1969. Last year, half of the award went to David Card for his research on how the minimum wage, immigration and education affect the labor market. The other half was shared by Joshua Angrist and Guido Imbens for proposing how to study issues that do not fit easily into traditional scientific methods.
Earlier today the prizes for the Economy went to economists males in 87 occasion and only in 2 cases to women.
