Who’re the winners of the 2022 Nobel Prize in Economics and why they gained

Ben Bernanke, Douglas Diamond and Philip Dybvig have been announced as winners of the prestigious award by the Royal Swedish Academy of Sciences

The Royal Swedish Academy of Sciences announced this Monday, 10th, that Ben Bernanke, Douglas Diamond and Philip Dybvig are the three winners of the Nobel Prize of economics 2022 for his “Research on Banking and Financial Crises”.

Among the motivations for the award is the significant improvement of “our understanding of the role of banks in the economy, particularly during financial crises an important finding from his research on why it is vital to avoid bank collapses”.

Extremely current issues, considering the difficult times the world is facing, between pandemic, war in ukraine is tall inflation. O Nobel Prize in Economics it was awarded to the three precisely for their studies on the role of banks in different economic cycles.

But who are the three winners of the Nobel Prize in Economics this year?

Discover the profile of the winners of the Nobel Prize in Economics 2022

good Bernanke was born in 1953 in Augusta, Georgia, and was the president of Federal Reserve (Fed), O central bank American, between 2006 and 2014, appointed by then US President George W. Bush, and reconfirmed in office by his successor, Barack Obama. Bernanke had to face the subprime crisis, which started in 2007-2008, and which was the worst since the big crash 1929. Currently Bernanke teaches at Brookings Institution in Washington.

This is the first time a former Fed chairman has won a Nobel Prize in Economics. The recognition to Bernanke is due to his 1983 article, where the American economist “demonstrated, with statistical analysis and historical sources, that bank runs led to bank failures, and that this was the mechanism that transformed a relatively common recession into the depression of the 1930s, the crisis most dramatic and serious we have seen in modern history.

Douglas W. Diamond was born in 1953, received a doctorate from Yale University in 1980, specializing in financial and liquidity crises, and today teaches finance at the University of Chicago.

According to Diamond, “central banks are capable of defeating inflation, we often forget a lesson in Milton Friedman and is that the monetary policy of central banks acts with a time delay”. However, he added, “part of the problem is the very large fiscal deficits around the world: monetary policy and fiscal policy must work together.”

According to Diamond, the global financial system today “is much more prepared” for the eventuality of a Financial crisis than in 2008.

Philip H. Dybvig was born in 1955, obtained his doctorate in 1979 at the University in Yale and is a teacher at Washington University, specialized in investments and market models.

Diamond and Dybvig were awarded the Prize for their theoric model, also created in 1983, which, as appears in the Nobel motivation, aims to “explain the ways in which a bank run phenomenon is determined, while providing a theoretical representation of the mechanism through which banks create liquidity”.

Despite the passing of the years, the model today represents the “theoretical reference point for the explanation of the phenomena considered, and it is not by chance that several later reformulations have been proposed”.

The Nobel Prize in Economics Isn’t Actually a Nobel

Unlike the other Nobel Prizes, the one in Economics was not established by Alfred Nobel’s will, but only in 1968 by the Sveriges Riksbank, the Central Bank of Sweden, in memory of the brilliant inventor of dynamite and entrepreneur. Winners are selected by the Royal Swedish Academy of Sciences according to the same principles as Nobel Prizes awarded since 1901. The first winners were announced a year later: Ragnar Frisch and Jan Tinbergen. In total, the Nobel Prize in Economics was awarded 53 times to 89 winners, between 1969 and 2021. The first woman to win was the American political scientist and scientist Elinor Ostrom in 2009.

By tradition, the Nobel Prize in Economics is always the last Prize to be announced, and it foresees the recognition of around one million euros for the winner. Delivery is always on December 10th, the date of death of Alfred Nobel. O Peace prize is delivered in Oslo, Norwegian capital, while the other prizes are presented in Stockholm, the capital of Sweden, in accordance with the wishes of the Nobel.

Last year, 2021, half of the award went to David Card for his research on how 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 questions that do not easily fit into traditional scientific methods.

the others awards Nobel of 2022 have already been delivered in the last few days. O Medicine Award went to Svante Paabo for his discoveries about the hominid genome. the of Chemistry was won by Carolyn R. Bertozzi, Morten Meldal and K. Barry Sharpless for paving the way for so-called “instant chemistry”. the of Physical it was awarded to Alain Aspect, John Clauser, and Anton Zeilinger for their studies of entanglement that paved the way for the quantum computer. the of Literature was won by the French writer Annie Ernaux. O Nobel Prize of Peace was awarded to the Belarusian dissident Ales Bialiatsky and the Russian human rights organizations Memorial and the Ukrainian Center for Civil Liberties.

Source: Exam