In 1983, Ben Bernanke published a paper on the role banks play in financial crises. In 2008, that research was instrumental in the Fed's controversial decision to bail out major banks. Yesterday, it won Bernanke and two colleagues a prize: The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
Today's show: Why that work was considered by the committee, how it influenced Ben Bernanke's response to the financial crisis of 2008, and how it shapes central bank policy today.
Further reading and listening:
Stacey Vanek Smith's interview with Ben Bernanke in 2017 for Planet Money
Ben S. Bernanke – Non-Monetary Effects of the Financial Crisis in the Propagation of the Great Depression
Ben S. Bernanke and Kenneth N. Kuttner – What Explains the Stock Market's Reaction to Federal Reserve Policy?
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