Congratulations to the newest Nobel economists
Another year, another prize. Meet the newest Nobel Laureates to be awarded the highest honor within the field of Economic Sciences.
Fewer things ring in the minds of economists focused on monetary policy quite like a financial crash. They examine how the crash happened, what could have been done differently, and mostly importantly, how to avoid a repeat occurrence.
Nobel Laureate Robert Engle is one of those economists. Throughout his career, Engle has developed models to measure and predict economic events like financial crashes and it was his ARCH model that won him global recognition and led to his Nobel status. Fellow Nobel Laureate Robert Shiller has been fighting the concept of market efficiency and advocating for new types of regulation to better regulate the financial market. For Shiller, he sees the creation of new financial markets as a way to spur innovation rather than looking to existing regulatory bodies for guidance.
Of course, Engle and Shiller are just two of a much larger group of economists and industry leaders who are actively trying to build up an economic resistance to events like financial crises. That group includes three more economists who can now also call themselves Laureates.
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The newest Laureates in economics
The newest Laureates in economics
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2022 was awarded this year to Ben S. Bernanke, Philip H. Dybvig, and Douglas W. Diamond for their research on banks and financial crises. Their work has improved our understanding of what roles banks have in our modern economies, and specifically during financial crises.
Ben Bernanke is an American banker who served as the 14th Chairman of the Federal Reserve, preceded by Alan Greenspan and succeeded by Janet Yellen. He was in office from 2006 to 2014, which of course included the financial crash of 2007/2008. He was also a tenured professor at Princeton University and is the author of The Courage to Act: A Memoir of a Crisis and Its Aftermath.
Philip Dybvig is an American economist and a professor of Banking and Finance at the Olin Business School of Washington University in St. Louis. He is the co-creator of the Diamond-Dybvig model, which examines how the mix of illiquid assets held by a bank, including things like business loans, and liquid liabilities can lead to self-fulfilling panic among bank clients and depositors, including investors, creditors, and shareholders.
Douglas Diamond is an American economist and currently the Merton H. Miller Distinguished Service Professor of Finance at the University of Chicago Booth School of Business. He’s done extensive research on financial crises and bank runs – a term for when many people withdraw money from a bank that they believe is in peril. He also co-created the Diamond-Dybvig model.
Congratulations again to the latest winners! Watch out for more information about them and their work on the UBS Nobel Perspectives website in the future.
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