Ben Bernanke was previously the chairman of the Federal Reserve
(Picture: Reuters)The former head of the Federal Reserve Ben Bernanke was awarded the economics Nobel prize today (October 10) for his research on banking and financial crises.
As well as Bernanke, The Royal Swedish Academy of Sciences also recognised the work of two other US economists, Douglas Diamond and Philip Dybvig, for their early 1980s research, which the institute said laid the groundwork for our current comprehension behind why banks are necessary.
The prize was given to Bernanke for his work on the Great Depression. Bernanke served as the head of the US central bank throughout the global financial crisis of 2008. His research demonstrated that bank runs were a crucial factor in the crisis becoming so severe and pervasive.
10 million Swedish kronor (£800k) cash that comes with the Nobel prize—officially known as the Sveriges Riksbank Prize in Economic Sciences—will be divided equally among the winners.
But who is Bernanke?
Who is Ben Bernanke?
Bernanke is an economist who served as the chairman of the Federal Reserve for eight years. While serving as chairman Bernanke was awarded the 2009 Time Person of the Year for overseeing the Federal Reserve’s response to the financial crisis of the late 2000s.
Under Bernanke's leadership, the central bank established a policy of quantitative easing, whereby it purchased assets to spur economic development.
Additionally, he strengthened public relations regarding the central bank's plans and goals. These methods are now a staple of the Fed's strategy for calming the markets and supporting the economy.
Around this time he was also a member of the Board of Governors of the Federal Reserve System, proposed the Bernanke doctrine, and first discussed “the Great Moderation“— the idea that the recent drop in volatility of traditional business cycles might be attributed to structural changes in the global economy.
After leaving the Fed in 2014, he was appointed a distinguished fellow at the Brookings Institution.
Prior to his role at the Fed, Bernanke was a tenured professor at Princeton University, where he oversaw the economics department from 1996 until September 2002, when he took a leave of absence from his official duties.
Bernanke attended Harvard College and later completed his PhD in economics from the Massachusetts Institute of Technology.
