This year's Nobel Prize in Economic Sciences was awarded to Ben S. Bernanke, Douglas W. Diamond, and Philip H. Dybvig for their research on banks and financial crises.

Bernanke, former Federal Reserve Chair and Distinguished Senior Fellow of Economic Studies at the Brookings Institution, was named a recipent of the 2022 award along with Diamond, the Merton H. Miller Distinguished Service Professor of Finance at the University of Chicago Booth School of Business, and Dybvig, the Boatmen’s Bancshares Professor of Banking and Finance at the Washington University in St. Louis. Bernanke, President of the AEA in 2019, had been named an AEA Distinguished Fellow in 2020, and served as editor of the American Economic Review from 2001–2004.

Ben S. Bernanke

Douglas W. Diamond

Philip H. Dybvig

Their work in the early 1980s established the foundation for modern banking research, improving our understanding of the role of banks in the economy, particularly with regard to financial crises.

Bernanke's research on the Great Depression demonstrated that bank failures, rather than being a consequence of a financial crisis as had been previously assumed, can actually cause financial crises to become more severe.

Diamond and Dybvig's theoretical work helped explain the role of banks in resolving the conflict between the goals of savers and borrowers: the former wanting assurance that they will have access to the cash that they have saved, while the latter desire a set amount of time to make repayments on the cash that they have borrowed.

"The laureates' insights have improved our ability to avoid both serious crises and expensive bailouts," said Tore Ellingsen, Chair of the Committee for the Prize in Economic Sciences.

The announcement can be read here: https://www.nobelprize.org/prizes/economic-sciences/2022/press-release/.