Former Fed Chairman Ben Bernanke wins 2022 Nobel Prize in Economics | Nobel Prize in Economics

Former US Federal Reserve Chairman Ben Bernanke was awarded the Nobel Prize in Economics this year alongside two other renowned economists for their work on financial crises.

The former head of the world’s most powerful central bank, who was at the helm during the 2008 financial crisis and helped oversee the global response, shared the award with economists Douglas Diamond and Philip Dybvig.

The Nobel foundation said the three had “significantly improved our understanding of the role of banks in the economy, particularly during financial crises”, and that their work had shown why avoiding bank failures was vital.

The prize, which comes with a cash prize of 10 million crowns (£800,000) and a gold medal, caps off a week of Nobel prizes. Created in the 1960s several decades after the first Nobel Prizes, it is technically known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

Bernanke, 68, who chaired the Fed between 2006 and 2014, led the US central bank’s response to the implosion of the financial system and the deep global economic crisis that followed.

He oversaw the Fed in cutting interest rates to near zero and pioneered the use of quantitative easing to try to prevent the last recession from turning into a repeat of the Great Depression years ago. 1930.

It has been criticized for its failure to spot the crash in advance, as well as the consequences of quantitative easing, after the Fed’s policy of buying US government debt drove up asset prices with adverse effects on inequality.

Although the Nobel Prize is usually awarded to academics rather than policymakers, Bernanke was known before his time at the Fed for his research on the Great Depression. The foundation said it awarded the prize for the work of the trio of economists in the early 1980s.

“Among other things, he [Bernanke] showed how bank runs were a decisive factor in the crisis becoming so deep and protracted,” the foundation said.

“When banks collapsed, valuable information about borrowers was lost and could not be quickly recreated. Society’s ability to channel savings into productive investments was severely diminished.

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