Ben S. Bernanke, a distinguished senior fellow in economic studies, shared the year 2022 Sveriges RiksbankAwardDoctor of Economic Sciences in memory of AlfredoNobel. “Through statistical analysis and research of historical sources,” said the Nobel committee: “Bernanke showed how failing banks played a decisive role in the global depression of the 1930s. Bernanke’s research shows that banking crises can have catastrophic consequences. This insight illustrates the importance of well-functioning banking regulation.”
Bernanke summarized his work on how stress in credit markets leads to higher borrowing costs and reduces the availability of credit, with consequent effects on the macro economy, in his Nobel Lecture, delivered in Stockholm on December 8, 2022. He offered two case studies: the Depression — the subject of work cited by the Nobel committee — and the 2007-2009 global financial crisis, which hit when he was chairman of the Federal Reserve. His analysis, Bernanke said, suggests the need for effective regulation to make the financial system more resilient to shocks, a macroprudential outlook for policymakers and the right tools to combat crises when they happen.