Even if financial conditions don’t cause the problem, they can over time make problems worse.Economist and former Federal Reserve chairman, Ben Bernanke, one of three recipients of the Nobel Prize in Economic Sciences. He is largely credited with developing the financial systems we rely on today to prevent widespread financial crises.
Why It Matters: Ben Bernanke conducted research in the 1980’s regarding the Great Depression. He went on to apply those findings as the Federal Reserve Chairman in the financial crisis of 2008. While his moves were often new and controversial, they set a foundation for how banking systems work to stabilize the economy.
- Example: Bernanke is responsible for central banks targeting a 2% inflation rate, helping guide decisions by the current Federal Reserve as they raise interest rates to bring down inflation over the long-term.
The Nobel Prize in Economic Sciences: “The laureates have provided a foundation for our modern understanding of why banks are needed, why they are vulnerable and what to do about it. We can also note that even though the financial crisis had large consequences, neither that, nor the Covid pandemic, led to depressions like in the ’30s,” Stockholm University economist John Hassler (a member of the prize committee) explained.
Most Nobel Laureates Develop Theories; Ben Bernanke Put His Into Practice (The Wall Street Journal)
Prize announcement (The Nobel Prize)
by Jenna Lee,