The Nobel Memorial Prize in Economic Sciences was awarded Monday to Ben Bernanke, the former Federal Reserve chair, and two other academics who have helped to reshape how the world understands the relationship between banks and financial crises.
Douglas Diamond, 68, of the University of Chicago and Philip Dybvig, 67, of Washington University in St. Louis — two economists who created a seminal model that explained the dynamics of bank runs and financial meltdowns — won the prize alongside Bernanke, 68, who is now at the Brookings Institution in Washington.
The three economists won for a body of work that stretches back into the 1980s. Their research has delved into different aspects of how banks become vulnerable to upheaval, how bank failures worsen and extend financial disasters, and how the system might be made safer in light of those risks.