Three Americans win Nobel economics prize

Former U.S. Federal Reserve Chair Ben Bernanke won the Nobel Prize for economics, along with economists Douglas Diamond and Philip Dybvig, for studying how the world tackles monetary crises. Their research illuminated how regulating banks and propping up lenders with public funds can keep a crisis from becoming worse. Diamond, based at the University of Chicago, and Dybvig, who is at Washington University in St. Louis, showed how government guarantees on deposits can stop a spiral.

Why was their work significant? Previously, economists had thought that bank runs were a product, not a cause of recessions. Bernanke now works for the Brookings Institution and centered his work around the Great Depression. His research showed that runs on banks during that time made the crisis worse.

Dig deeper: Listen to Nick Eicher and David Bahnsen discuss persistent inflation on The World and Everything in It podcast.