Three researchers from US universities, including former US Federal Reserve Chairman Ben Bernanke, were awarded this year’s Nobel Prize in Economics for their contributions to finding ways to prevent and deal with financial crises like the one that occurred in 2008. .
The award, officially designated the Alfred Nobel Memorial Prize of the Bank of Sweden, was presented this Monday to Ben Bernanke, Douglas Diamond and Philip Dibwig. “[Os laureados] significantly improved our understanding of the role of banks in the economy, especially during financial crises, as well as the ways in which financial markets are regulated. swedish academy.
Ben Bernanke was chairman of the US Federal Reserve when the collapse of the investment bank Lehman Brothes in 2008 sent the international financial system into a severe crisis.
However, not for the role he played during this crisis, the American economist received the Nobel Prize on Monday. Before taking up his duties at the Fed, Bernanke devoted himself as a scholar to investigating financial crises such as the Great Depression of the 1930s.
“Among other things, it showed that bank runs were a critical factor in making this crisis so deep and prolonged,” says the note about Bernank, who is now a Fellow at the Brookings Institution.
When Ben Bernanke analyzed what happened during the Great Depression of the 1930s, the most common idea among economists was that the problem was, in essence, that the central bank was not injecting enough liquidity into the economy. Bernanke agreed with this analysis, but argued that the explanation for the extraordinary scale and duration of the crisis lay in another factor: successive bank failures that prevented the financial system from playing its role of transforming savings into investment for an extended period of time. And instead of believing that it was the economic crisis that led to the collapse of the banks, he argued that the bankruptcies were the reason that the crisis was so deep and prolonged.
“Using historical sources and scientific methods, Bernanke’s analysis showed which factors played an important role in the fall in GDP. And he came to the conclusion that factors directly related to bank failures contributed the lion’s share of the recession, ”say the members of the academy.
Also in the 1980s, Douglas Diamond of the University of Chicago and Philip Dibwig of Washington University in St. Louis. Louis, other Nobel laureates, have dedicated themselves to learning how to avoid a wave of bank failures during the economic crisis, which makes the problems in the economy even more serious.
The two economists, according to the academy, “have developed theoretical models that explain why banks exist, how their role in society makes them vulnerable to rumors of their collapse, and how society can minimize that vulnerability.”
One of the solutions presented by Douglas Diamond and Philip Dybwig is now being put into practice in a large number of countries, including Portugal: the introduction by the state of bank deposit guarantee mechanisms that make depositors confident that up to a certain amount the state protects their money, they are not in a hurry to withdraw their deposits as soon as rumors of their bank failure reach them.