Three American economists, whose work is credited with helping avert financial catastrophes, were awarded the Nobel Prize in economics October 10.
The economists — Ben Bernanke, Douglas Diamond and Philip Dybvig — conducted research in the 1980s that contributed to greater understanding of banks’ role in the economy.
Bernanke’s analysis of the 1930s-era Great Depression showed how supporting banks in recessions can prevent a deep, prolonged economic downturn. Diamond and Dybvig’s research laid a foundation for the financial regulation needed for economic stability.
The Royal Swedish Academy of Sciences, which determines Nobel Prize winners, says the economists’ work has shaped how countries respond to economic crises.
“The actions taken by central banks and financial regulators around the world in confronting two recent major crises — the Great Recession and the economic downturn that was generated by the…
