For their studies on banks and financial crises, American economists Ben Bernanke, Douglas Diamond, and Philip Dybvig were given the 2022 Nobel Prize in economic sciences.
From 2006 to 2014, Bernanke served as the Federal Reserve’s chairman. He is currently a fellow at the Brookings Institution in Washington, D.C. Dybvig teaches at the Olin Business School at Washington University in St. Louis, whereas Diamond teaches at the University of Chicago Booth School of Business.
In his examination of the 1930s Great Depression, Bernanke explained how and why bank runs contributed significantly to the crisis’ length and severity. In contrast, Diamond and Dybvig’s work examined how banks play a crucial social function in mediating potential conflicts between savers’ needs for short-term access to their money and the economy’s need for savings to be invested for the long term, as well as how governments can prevent bank runs by offering deposit insurance and serving as a lender of last resort.
The prizewinners will each receive 10 million Swedish krona ($883,000), which is known formally as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
