Former U.S. Federal Reserve Chair Ben Bernanke, who put his academic expertise on the Great Depression to work reviving the economy after the 2007-2008 financial crisis, won the Nobel Prize along with two other U.S.-based economists. — The Associated P...
STOCKHOLM — Former U.S. Federal Reserve Chair Ben Bernanke, who put his academic expertise on the Great Depression to work reviving the American economy after the 2007-2008 financial crisis, won the Nobel Prize in economic sciences along with two other U.S.-based economists for their research into the fallout from bank failures.
“Financial crises and depressions are kind of the worst thing that can happen to the economy,” said John Hassler of the Committee for the Prize in Economic Sciences. “These things can happen again. And we need to have an understanding of the mechanism behind those and what to do about it. And the laureates this year provide that.”
Diamond said the Nobel came as a surprise. On Monday morning, he said, “I was sleeping very soundly and then all of a sudden, off went my cellphone” with good news from Nobel committee. The trio’s research took on great real-world significance when investors sent the financial system into a panic during fall 2008.
They also pushed long-term interest rates to historic lows and led to fierce criticism of Bernanke, particularly from some 2012 Republican presidential candidates, that the Fed was hurting the value of the dollar and running the risk of igniting inflation later. When COVID-19 slammed the U.S. economy in early 2020, the Fed, under Chair Jerome Powell, quickly cut short-term interest rates back to zero and pumped money into the financial system. The aggressive intervention — along with massive government spending — quickly ended the downturn and triggered a powerful economic recovery.
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