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Ben Bernanke PhD ’79 awarded a share of the Nobel Prize in economic sciences

MIT alumnus and two others honored for research on the role of banks in the economy, including during financial crises.
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Headshot of Ben Bernanke in front of a black marble wall.
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Ben Bernanke PhD ’79 has been awarded a share of the 2022 Nobel Prize in economic sciences. A former chair of the Federal Reserve Board, he is now a distinguished fellow in residence at the Brookings Institution.
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Photo: U.S. Federal Reserve

Ben S. Bernanke PhD ’79, an economist who applied his scholarly experience to his work as chair of the U.S. Federal Reserve during the economic and financial-sector crisis of 2008-2009, has been awarded a share of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2022, the Royal Swedish Academy of Sciences announced today.

Bernanke, who received his doctorate from MIT’s Department of Economics, has won the award along with Douglas W. Diamond, an economics professor at the University of Chicago Booth School of Business, and Philip H. Dybvig, an economics professor at the Olin School of Business at Washington University in Saint Louis.

The Royal Swedish Academy of Sciences cited Bernanke’s work showing how, during the Great Depression of the 1930s, bank runs exacerbated the crisis by limiting the banking sector’s capacity to act. After many banks collapsed, the Nobel citation states, “valuable information about borrowers was lost and could not be recreated quickly. Society’s ability to channel savings to productive investments was thus severely diminished.”

That research appears in a 1983 paper, “Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression,” published in the American Economic Review.

Bernanke received his undergraduate degree from Harvard University. After completing his doctoral work at MIT, Bernanke served on the faculty at Stanford University and then Princeton University, before joining the U.S. Federal Reserve Board in 2002, and then serving from 2005 to 2006 as chair of the President’s Council of Economic Advisers under President George W. Bush. He served as chair of the Federal Reserve Board from 2006 to 2014. Since 2014, he has been a distinguished fellow in residence at the Brookings Institution.

During the 2020-21 academic year, Bernanke also served as a distinguished senior fellow at the Golub Center for Finance and Policy of the MIT Sloan School of Management.  

Bernanke’s doctoral thesis, titled “Long-Term Commitments, Dynamic Optimization, and the Business Cycle,” was completed with fomer MIT professor Stanley Fischer as his principal faculty advisor, with former MIT professor Rudiger Dornbusch and Institute Professor Emeritus Robert Solow serving as the second and third readers.

Through 2022, eight people have won the Nobel Prize for economic sciences while serving on the MIT faculty, while 13 MIT alumni and eight former MIT faculty have also won the award.

Press Mentions

The Washington Post

Washington Post reporter David Lynch highlights the work of Ben S. Bernanke PhD ’79, one of the recipients of this year’s Nobel Prize in economic sciences, who was honored for his research on the role banks play during financial turmoil. “Bernanke demonstrated that bank failures — rather than resulting from the downturn — were responsible for making it so deep and so long. When banks collapsed, valuable information about borrowers disappeared, making it difficult for new institutions to channel savings to productive investments,” notes Lynch.

Associated Press

Ben S. Bernanke PhD ’79 has been honored as one of the recipients of this year’s Sveriges Riksbank Prize in Economic Sciences, reports the Associated Press. Bernanke was recognized for his work examining the Great Depression and “showing the danger of bank runs — when panicked people withdraw their savings — and how bank collapses led to widespread economic devastation,” notes the AP.

Forbes

Ben Bernanke PhD ’79 has won a share of the 2022 Sveriges Riksbank Prize in Economic Sciences for his research on banks and financial crises, reports Micahel T. Nietzel for Forbes. Bernanke and his fellow winners are credited with significantly improving “our understanding of the role of banks in the economy, particularly during financial crises,” says The Royal Swedish Academy of Sciences.

New York Times

The 2022 Nobel Prize in economic sciences was awarded in part to Ben S. Bernanke PhD ’79 for his research showing that “bank failures can propagate a financial crisis rather than simply be a result of the crisis,” reports Jeanna Smialek for The New York Times. When asked about his advice for younger economists, Bernanke noted “one of the lessons of my life is, you never know what is going to happen.”

CNN

Ben Bernanke PhD ’79, former chair of the Federal Reserve, has been awarded the 2022 Nobel Prize in economic sciences, reports Allison Morrow for CNN. Bernanke “received the award for his research on the Great Depression,” says Morrow. “In short, his work demonstrates that banks’ failures are often a cause, not merely a consequence, of financial crises.”

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