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

The former chairman of the US Federal Reserve Ben Bernanke has been awarded this year’s Nobel Prize in Economics along with two other leading economists for their work on financial crises.

The former head of the world’s most powerful central bank, who presided over 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 it was important to avoid bank collapses.

The award, which comes with a cash prize of 10 million kroner (£800,000) and a gold medal, covers a week of Nobel Prizes. Established in the 1960s several decades after the original Nobel Prizes, it is technically known as the Swedish 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 subsequent deep global economic crisis.

He oversaw the Fed lowering interest rates to near zero and pioneered the use of quantitative easing in an effort to prevent the last recession from turning into a repeat of the Great Depression of the 1930s.

He has faced criticism for not spotting the crash in advance, as well as for the consequences of quantitative easing after the Fed’s policy of buying US government debt drove up asset prices with damaging 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 into the Great Depression. The foundation said it had 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 long-lasting,” says the foundation.

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

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