The Nobel Economics Prize Reading List In 2022

The Nobel Economics Prize in 2022 is about banking and financial crisis. These Economics Prize Reading List will help you better understand the winners of the Economics Prize.

On October 10, 2022, the Royal Swedish Academy of Sciences announced that the The Nobel Economics Prize in 2022 would be awarded to Ben S. Bernanke, former chairman of the Federal Reserve, Douglas W. Diamond, professor of the Booth School of Business at the University of Chicago, and Philip H. Dybvig, professor of the Olin School of Business at the University of Washington, in recognition of their research on banking and financial crisis.

1. Ben S. Bernanke

Bernanke is a world famous macroeconomist. His research field is the Great Depression, the financial crisis and monetary policy. He explained that the Great Depression is the “Holy Grail” of macroeconomics. His research on the Great Depression and the financial crisis has deepened the understanding of macroeconomic operation and financial system failure.

As for the current high inflation and the tightening policy of the Federal Reserve, Bernanke believes that although the current inflation is often compared with the hyperinflation in the late 1970s and early 1980s, the current high inflation is different from the last high inflation. The current Federal Reserve has higher credibility as an “inflation fighter” and higher public support for interest rate increases.

Recommended for Economics Prize Reading List

1. Essays on the Great Depression

In 1929, the Great Depression occurred in the United States and then spread to the whole world. At that time, the stock market collapsed, banks failed, inflation remained high, financial markets were in turmoil, people’s income declined, tens of millions of people lost their jobs.

The Great Depression not only led to great changes in the economy and society of the United States and even the world, but also made modern macroeconomics an independent discipline academically. Seeking a reasonable theoretical explanation for the Great Depression is a challenging task for the economic community, as well as an attempt to find a feasible solution to similar crises later.

There is no such thing as a “waste” depression in academia. For decades, generations of scholars have been studying the Great Depression. The research on the Great Depression and its conclusions have affected the monetary policy and financial supervision of later generations.

Bernanke is an outstanding representative of many researchers. Bernanke, who calls himself a “Great Depression fan”, has written a series of research articles on the Great Depression, which have been assembled into the book Essays on the Great Depression.

In his book, he used a large number of data and materials from the United States and many other countries, including economic data, wages, employment, etc., to make an in-depth analysis of the causes and transmission mechanism of the Great Depression from the perspective of total supply, total demand, nominal wages, etc.

He believed that the study of the Great Depression could reveal the laws and nature of many economic operations. These studies indeed helped him learn from the policy lessons of the Great Depression when he was the chairman of the Federal Reserve to deal with the subprime crisis in 2008, and avoided the same mistakes on the whole, helping the United States survive the crisis.

The Great Depression of the 1930s has long been a history, but looking at all kinds of economic news in the world, the lessons of the Great Depression are still of great warning significance.

2. The Federal Reserve and the Financial Crisis

The Federal Reserve and the Financial Crisis explains that Ben Bernanke is facing the most serious financial crisis since the Great Depression and is destined to play three important roles in the American economy, namely, the terminator of the interest rate increase movement, the shock absorber of the decline of the housing market, and the patrolman who provides security for the American economic train. Bernanke successfully played these three roles.

This book is a collection of Bernanke’s financial ideas behind many of the policies adopted by the Federal Reserve in response to the financial crisis, as well as his financial philosophy.

The book is mainly divided into four parts. The content runs through the more than 90 years of history of the Federal Reserve from its establishment in 1914 to the financial crisis.

It is not only a brief history of the central bank’s financial history of the Federal Reserve, but also a history of the evolution of financial policies in response to the crisis.

The first part mainly describes the origin and mission of the Federal Reserve. The second part describes the Federal Reserve after World War II until the recent outbreak of the financial crisis. The third and fourth parts mainly describe the financial crisis and the Federal Reserve’s response measures and subsequent impact.

These two parts allow us to fully understand how the relevant policies of the Federal Reserve were introduced and the philosophy behind them.

3. The Courage to Act: A memoir of a crisis and its aftermath

The Courage to Act comprehensively explains Bernanke’s financial philosophy of facing risks and saving the crisis, which is an unprecedented disclosure of the inside story of economic crisis rescue, as well as his in-depth thinking and realistic consideration of financial policy.

The book records and explains the bad financial crisis and economic recession since the Great Depression, reviews Washington’s response policies from the perspective of insiders, fully discloses the details of the decision-making process, vividly depicts the personal images of the main characters, and also combs Bernanke’s thinking and reflection on financial policies and tools in the professional context.

The book records and explains the worst financial crisis and economic recession since the great depression , with insiders are reviewed from the point of view of the Washington policy response, fully discloses the details of the decision-making process, vividly depicts the personal images of the main characters, and also combs Bernanke’s thinking and reflection on financial policies and tools in the professional context.

Book Reviews

• This book describes the process of the US government and financial regulators to cope with the Great Recession in 2008, which is undoubtedly the best of its kind. (New York Times Book Review)
• This book has revealed many details, so that we can fully understand this critical period in the world economic history, which is very enlightening. (New York Times)
• The Federal Reserve has taken a series of drastic actions to avoid another Great Depression and promote the recovery of the American economy. This book explains why the Federal Reserve did so in a serious, detailed and particularly clear way. (Washington Post)
• This book describes how the Federal Reserve can turn the tide and save the world from a disaster like the Great Depression again… Not to mention what mistakes the Federal Reserve made before the crisis broke out, at least the Federal Reserve under the leadership of Chairman Bernanke saved the United States and the world from suffering again. Human beings should be grateful. (Martin Wolf, Financial Times)
• Bernanke pointed out exactly what the problem is and how to avoid similar problems in the future.(Los Angeles Times)
• This book introduces the economic thoughts of a former Federal Reserve chairman in simple terms.(News website Vox.com)

4. Fire Fighting: The Financial Crisis and Its Lessons

The financial crisis in 2008 was a serious economic recession since the Great Depression. The crisis severely impacted the global credit market and quickly spread to the international financial system.

At the critical moment of the crisis, the threesome with Ben Bernanke, Timothy Geithner and Henry Paulson as the core successfully saved the American economy from collapse through a series of unconventional emergency interventions.

10 years after the financial crisis, Bernanke, Geithner and Paulson once again reflected on the profound lessons of the 2008 financial crisis. It is not easy to realize the arrival of the crisis, as Bernanke said: “The enemy is being forgotten.”

In this book, they once again discussed the following questions in depth: How did the crisis break out? Why is its impact so serious? In the difficult process of preventing the crisis from evolving into the Second Great Depression, what “fire-fighting” tools has the Federal Reserve found? How can these tools help the United States effectively cope with the post crisis recession?

This book is the rethinking of the “rescue trio” ten years after the international financial crisis. In this book, Bernanke, Geithner and Paulson provide valuable references for their successors, finance ministers of other countries and regulators of central banks to deal with future crises.

The crisis “Fire Fighting” analyzed in the book not only reflects what is happening now, but also will be far more valuable than the next decade.

2. Douglas W. Diamond

Douglas W. Diamond was born in 1953. He studied at Brown University during his undergraduate period. In 1975, he received a bachelor’s degree, and then went to Yale University to study. He received a master’s degree (M.A) in 1976, an academic degree (M.Phil) in 1977, and a doctor’s degree in 1980.

After graduation, he has been engaged in teaching and research at the University of Chicago. Diamond’s research focuses on financial intermediation, liquidity, financial crisis, and financial regulation. In these fields, he and his co authors such as Davig and Rajan have made many pioneering contributions.

Main papers Recommended for Economics Prize Reading List

1.  Liquidity, pledgeability, and the nature of lending 

• Author： Diamond, Douglas W.CAa;Hu, Yunzhic.CAb;Rajan, Raghuram G.CAc
• Source：Journal of Financial Economics 2021
• Get Access：ScienceDirect、EBSCO(asc/bsc)

2. A Theory of Debt Maturity: The Long and Short of Debt Overhang 

• Author: DOUGLAS W. DIAMOND and ZHIGUO HE
• Source：The Journal of Finance 2014 Vol.69 No.2 P719-762  
• Get Access： JSTOR、EBSCO_Econlit、 EBSCO(asc/bsc)、 Wiley InterScience

3.  Illiquid Banks, Financial Stability, and Interest Rate Policy

• Author：Diamond, Douglas W1;Rajan, Raghuram G
• Source：Journal of Political Economy 2012 Vol.120 No.3 P552-591  
• Get Access： JSTOR、EBSCO(asc/bsc)、EBSCO_Econlit

3.Philip H. Dybvig

Philip H. Dybvig is a professor of finance at the Olin School of Business at Washington University in St. Louis, USA. From 2010 to 2021, he served as the dean of the Institute of Finance of China’s Southwest University of Finance and Economics, professor of finance, and consultant expert of financial discipline construction.

As an internationally renowned scholar, he has been engaged in financial teaching and research for a long time, and has made outstanding achievements in banking theory, asset pricing, interest rate theory, corporate governance, monetary policy of the Central Bank, etc.

In particular, the pioneering research on bank runs has become one of the most cited documents in the economic and financial fields, which has had an important impact on research in banking, macroeconomics, microeconomics and finance, some research achievements are considered as “laying the foundation of modern finance”.

Main papers Recommended for Economics Prize Reading List

1. Consensus in Diverse Corporate Boards  

• Author: Nina Baranchuk and Philip H. Dybvig
• Source: The Review of Financial Studies 2009 Vol.22 No.2 P715-747 
• Get Access： EBSCO(asc/bsc) 、JSTOR

2. The Fallacy of Large Numbers

• Author：Dybvig, Philip H
• Source：Journal of Applied Finance 2005 Vol.15 No.2 P5-12  
• Get Access： EBSCO(asc/bsc)、EBSCO_Econlit

3. Employee Reload Options: Pricing, Hedging, and Optimal Exercise 

• Author：Philip H. Dybvig and Mark Loewenstein
• Source：The Review of Financial Studies 2003 Vol.16 No.1 P145-171  
• Get Access： JSTOR、 EBSCO_Econlit、 ProQuest

4.Pricing Long Bonds: Pitfalls and Opportunities. SSCI 

• Author：Philip H. Dybvig;William J. Marshall
• Source：Financial Analysts Journal 1996 Vol.52 No.1 P32-39  
• Get Access： EBSCO(asc/bsc)、 JSTOR、 Taylor & Francis Online

5. Dusenberry’s Ratcheting of Consumption: Optimal Dynamic Consumption and Investment Given Intolerance for Any Decline in Standard of Living 

• Author：Philip H. Dybvig
• Source：Review of Economic Studies 1995 Vol.62 No.2 P287-313 
• Get Access： ProQuest、 JSTOR、 EBSCO_Econlit

6. Inefficient Dynamic Portfolio Strategies or How to Throw Away a Million Dollars in the Stock Market 

• Author：Philip H. Dybvig
• Source：The Review of Financial Studies 1988 Vol.1 No.1 P67-88  
• Get Access： EBSCO_Econlit、 EBSCO(asc/bsc)、 JSTOR、 ProQuest

7. Bank Runs, Deposit Insurance, and Liquidity 

• Author：Diamond, Douglas W. Dybvig, Philip H.
• Source：Journal of Political Economy 1983 Vol.91 No.3 P401-419  
• Get Access： ProQuest、 EBSCO(asc/bsc) 、EBSCO_Econlit、 JSTOR