“For their research on banking and financial crises,” the Royal Swedish Academy of Sciences announced today.
With the announcement of this year’s winners for the Nobel Prize in Economics, the announcements for the 2022 Nobel Prizes were completed today.
The Royal Swedish Academy of Sciences has awarded the 2022 Nobel Prize in Economics to Ben S. Bernanke, Douglas W. Diamond and Philip H. Dybvig.
BREAKING NEWS:
The Royal Swedish Academy of Sciences has decided to award the 2022 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Ben S. Bernanke, Douglas W. Diamond and Philip H. Dybvig “for research on banks and financial crises.”#NobelPrize pic.twitter.com/cW0sLFh2sj— The Nobel Prize (@NobelPrize) October 10, 2022
The three economists were honored “for their research into banks and financial crises,” according to the Nobel Committee’s announcement,
The work for which Ben Bernanke, Douglas Diamond and Philip Dybvig are being recognized has been crucial to subsequent research that has enhanced our understanding of banks, bank regulation, banking crises and how financial crises should be managed.#NobelPrize pic.twitter.com/4drJwZ0yF9
— The Nobel Prize (@NobelPrize) October 10, 2022
Aged 68, Mr Ben Bernanke was head of the Federal Reserve (Fed) from 2006 to 2014, a tenure marked by the 2008 financial crisis and the collapse of Bank of America Lehman Brothers.
Bernanke mainly analyzed the Great Crash of the 1930s, the worst financial crisis in modern history. It mainly showed how sharp and sudden withdrawals of cash from banks due to panic or phobia are a decisive factor in prolonging and worsening crises.
“Ben Bernanke, in a 1983 paper, showed with statistical analysis and historical sources that sharp and sudden withdrawals from banks due to panic or fear lead to bank failures, and this was the mechanism that turned a relatively ordinary recession into a stock market crash. 1930s, the most dramatic and severe crisis the world has seen in modern history,” said John Hassler, a member of the committee that awards the Nobel Prize in Economics.
Douglas Diamond and Philip Dybvig, for their part, they developed theoretical models that show why banks exist and why their role in society makes them vulnerable to rumors of imminent collapse.
Like the other Nobels, the Economics Nobel comes with a cash prize of 10 million Swedish kroner (€920,000), which the three laureates will share.
The Nobel Prize in Economics was created by the central bank of Sweden “in memory of Alfred Nobel” and was added in 1969 to the other five traditional prizes (medicine, physics, chemistry, literature and peace), more than 60 years after the others.
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