Ex-Princeton Professor Shares 2022 Nobel Prize In Economic Sciences

PRINCETON, NJ — Former Princeton University Professor, Ben Bernanke, was awarded the 2022 Nobel Prize in Economic Sciences. He shares the award with Douglas W. Diamond of the University of Chicago and Philip H. Dybvig of Washington University in St. Louis, MO.

Bernanke was a professor of economics and public affairs from 1985 to 2002, and also chairman of the University’s economics department from 1996 to 2002. He is the founder of the Bendheim Center for Finance at the University.

The Royal Swedish Academy of Sciences made the announcement on Oct. 10. Bernanke, Diamond and Dybvig were awarded for improving “understanding of the role of banks in the economy, particularly during financial crises. An important finding in their research is why avoiding bank collapses is vital.”

“Modern banking research clarifies why we have banks, how to make them less vulnerable in crises and how bank collapses exacerbate financial crises,” The Royal Swedish Academy said. “The foundations of this research were laid by Ben Bernanke, Douglas Diamond and Philip Dybvig in the early 1980s. Their analyses have been of great practical importance in regulating financial markets and dealing with financial crises.”

Bernanke analyzed the Great Depression of the 1930s. “Among other things, he showed how bank runs were a decisive factor in the crisis becoming so deep and prolonged. When the banks collapsed, 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,” the Nobel Committee said.

The prize amount is 10 million Swedish kroner, about $900,000. It will be divided among the winners.

Bernanke joined Princeton as a professor of economics and public affairs. He was named chair of the economics department in 1996. The same year, he was named the Howard Harrison and Gabrielle Snyder Beck Professor of Economics and Public affairs. He took public service leave from the university in 2002, when he joined the Federal Reserve Board, and resigned in 2005.

“All of us at Princeton know Ben Bernanke to be not only a marvelous scholar but also a generous teacher, beloved colleague, and devoted University citizen,” Princeton President Christopher L. Eisgruber said in a statement.

“By using his path-breaking research, extensive learning, and practical wisdom to help lead America through a difficult financial crisis, Ben has exemplified brilliantly Princeton’s commitment to be ‘in the nation’s service.’ The Princeton community joins in congratulating him enthusiastically on this extraordinary and well-deserved honor.”

Economics and Public Affairs Professor Alan Blinder, who played an important role in recuriting Bernanke to Princeton said he was a “superstar” even as a graduate student.

“I was bowled over by young Ben Bernanke’s early work, and did everything I could to attract him to Princeton, where he fit perfectly and was very productive as a scholar,” Blinder said in a statement. “I practically cried when he left, though it was certainly for a good cause!”

Bernanke is currently a Distinguished Fellow in Residence at the Brookings Institution.

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