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Former Federal Reserve chairman Ben Bernanke was awarded the Nobel Prize in Economics Monday, along with economists Douglas Diamond and Philip Dybvig, for their research on bank runs and measures to prevent them.
The three will share the prize money of 10 million Swedish kronor, or $886,000.
Bernanke, who’s now at the Brookings Institution, was recognized for his research on the role of bank failures in deepening and prolonging the Great Depression in the 1930s. He put many of those lessons to work as Fed chairman, pioneering the emergency lending programs that the central bank used to address the financial crisis of 2008-9.
Diamond, who’s at the University of Chicago, and Dybvig, who’s at Washington University in St. Louis, coauthored an influential paper on the critical role that banks play as financial middlemen, and how that role can be undermined by a mismatch in timing.
