Nobel Prize in Economics 2022

About:

• Ben S. Bernanke, Douglas W. Diamond and Philip H. Dybvig won the 2022 Nobel Prize in Economics for research on banks and financial crises.
• According to Nobel committee, the three laureates have significantly improved our understanding of the role of banks in the economy, particularly during financial crises, and an important finding in their research is why avoiding bank collapses is vital.

Douglas W Diamond and Philip H Dybvi

• Both Diamond and Dybvig worked together to develop theoretical models explaining why banks exist, how their role in society makes them vulnerable to rumours about their impending collapse, and how society can lessen this vulnerability.
• These insights form the foundation of modern bank regulation.

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Ben S. Bernanke

• Former Federal Reserve chairman Ben Bernanke analysed the Great Depression of the 1930s, the worst economic crisis in modern history. Among other things, he showed how bank runs were a decisive factor in the crisis becoming so deep and prolonged.
• Using historical sources and statistical methods, Bernanke’s analysis showed which factors were important in the drop in gross domestic product.

Sveriges Riksbank Prize in Economic Sciences

• The Sveriges Riksbank Prize in Economic Sciences is awarded in memory of Alfred Nobel.
• While Alfred Nobel did not mention the economics prize in his will, the Sveriges Riksbank established the award in 1968 and the Royal Swedish Academy of Sciences was given the task of selecting the Laureates in Economic Sciences, starting in 1969.

Source : Indian Express