Ben Bernanke, Douglas Diamond, and Philip Dybvig of the United States were awarded the Nobel Prize in Economics Sciences in 2022 for their work on banks and financial crises.
Bernanke served as chairman of the Federal Reserve from 2006 to 2014 and is now a senior fellow at the Brookings Institution in Washington, D.C. Diamond teaches at the University of Chicago Booth School of Business, and Dybvig teaches at Washington University in St. Louis’ Olin Business School.
The Nobel committee stated that their work in the early 1980s “significantly improved our understanding of the role of banks in the economy, particularly during financial crises,” as well as demonstrating the importance of avoiding bank failures. This was “invaluable” during the 2008-09 financial crisis and the coronavirus pandemic, they added.
Bernanke’s analysis of the 1930s Great Depression revealed how and why bank runs were a major cause of the crisis’s length and severity. Meanwhile, Diamond and Dybvig investigated the socially important role banks play in resolving the potential conflict between savers wanting access to their money and the economy needing savings to be invested; and how governments can help prevent bank runs by providing deposit insurance and acting as a lender of last resort.
The prize, officially known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is worth 10 million Swedish krona ($883,000) to each winner.
The winners are chosen by the Royal Swedish Academy of Sciences from a list of candidates recommended by the Economic Sciences Prize Committee. This selection is made from names submitted by approximately 3,000 professors, previous winners, and academy members by invitation. No one can nominate themselves.
Last year, the economics prize was divided into three parts. It was given to David Card for his work in labour economics, and to Joshua D. Angrist and Guido W. Imbens for their contributions to causal relationship analysis.
Unlike the other five Nobel prizes, which have been bestowed in the will of Swedish inventor, chemist, and engineer Alfred Nobel since 1901, the economics award was established in his honour by Sweden’s central bank in 1969. Every year, it is the last to be announced.
Belarusian human rights activist Ales Bialiatski, the Russian human rights organisation Memorial, and the Ukrainian NGO Center for Civil Liberties received the prestigious Nobel Peace Prize on Friday.
This year’s physics prize went to Alain Aspect, John Francis Clauser, and Anton Zeilinger for quantum mechanics discoveries. According to the Nobel committee, they used “groundbreaking experiments” on particles in entangled states to usher in a new era of quantum technology.
Carolyn R. Bertozzi received the chemistry prize for her work using click and bioorthogonal chemistry to map cells and develop more targeted cancer treatments, and Morten Meldal and K. Barry Sharpless were recognised for “laying the foundations of click chemistry,” which involves connecting biocompatible molecules.
Svante Paabo received the medicine prize “for his discoveries concerning the genomes of extinct hominins and human evolution.”
Annie Ernaux, a French author, received the prize for literature.