Nobel Prize In Economics Goes To Three US Economists

Nobel Prize In Economics Goes To Three US Economists

 

Economics is the last Nobel Prize announced each year. In 2022 it will go to Ben Bernanke and two other economists.

This year’s Nobel Prize in Economic Sciences goes to the three American economists Ben Bernanke, Douglas Diamond and Philip Dybvig. This was announced by the Royal Swedish Academy of Sciences on Monday in Stockholm. Bernanke, former Fed President, and the other two economists will receive the prestigious award “for their research into banks and financial crises,” said the academy’s secretary-general, Hans Ellegren, at the announcement on the university campus in the Swedish capital.

 

Bernanke, Diamond and Dybvig laid the foundations for modern banking research in the early 1980s with contributions on why banks exist at all, how to make them less vulnerable in crises and how important it is to prevent them from collapsing. “Your analyzes have been of great practical importance in regulating the financial markets and dealing with financial crises,” emphasized the Academy.

 

Prize winners have shown “that banks have to be there”

 

As President of the US Federal Reserve from 2006 to early 2014, Bernanke, who is now 68, was one of the most powerful men in the financial world. During this time he steered the United States through the global financial crisis, which began in the American real estate market in 2007 and culminated in the bankruptcy of the US bank Lehman Brothers in 2008.

It was the worst economic crisis since the Great Depression of the 1930s – the very crisis that Bernanke had previously made a name for himself in the academic world for studying. The Swedish economist John Hassler, from the responsible Nobel committee, explained at the announcement that he had shown how the rush of customers to banks to withdraw their savings had turned a relatively ordinary recession in the 1930s into a serious crisis with dramatic consequences worldwide. “He showed that banks have to be there,” said Hassler. Without them, the economy would function far less well.

 

Today Bernanke works at the think tank Brookings Institution in the US capital Washington. His co-award winners Diamond and Dybvig hold professorships at the University of Chicago and Washington University in St. Louis, Missouri, respectively. He was sound asleep when his cell phone suddenly rang, Diamond said on the phone when the announcement was made, with a view to the several-hour time difference between Europe and the USA. The call from Stockholm was a surprise.

 

Economics category: not a classic Nobel Prize

 

This means that all Nobel Prize winners for this year have been announced. The names of the winners in the categories Medicine , Physics , Chemistry , Literature and Peace were announced over the past week. The Nobel Prizes are traditionally presented at a ceremony on December 10th, the anniversary of the death of prize donor and dynamite inventor Alfred Nobel (1833-1896). All Nobel prizes this year are again endowed with ten million Swedish crowns. Converted that is currently almost 915,000 euros.

The Nobel Prize in Economic Sciences is the only one of the Nobel Prizes that does not go back to Nobel’s will. It has been donated by the Swedish Reichsbank since the late 1960s and is therefore not, strictly speaking, one of the classic Nobel Prizes. Last year, the US-based economists David Card, Joshua Angrist and Guido Imbens were honored with the prestigious award.

 

In general, the Nobel Prize in Economics very often goes to economists who come from the USA or do research there. So far, the only German prizewinner in this category has been the Bonn scientist Reinhard Selten: He received the award in 1994 together with John Nash and John Harsanyi for their groundbreaking contributions to non-cooperative game theory.

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