(1953 - )
Ben Shalom Bernanke is a Jewish American who was the 14th Chairman of the U.S. Federal Reserve and shared the 2022 Nobel Prize in economics.
Bernanke (born December 13, 1953) was born in Georgia and raised in South Carolina, where his family attended the Ohav Shalom local synagogue. As a young child, Bernanke learned Hebrew from his maternal grandfather Harold Friedman, a professional chazzan, shochet, and Hebrew teacher. Bernanke later received a B.A. in economics in 1975 from Harvard University (summa cum laude) and a Ph.D. in economics in 1979 from the Massachusetts Institute of Technology.
From 1979 to 1985, Bernanke was a Professor of Economics at the Graduate School of Business at Stanford University. His teaching career also included serving as a Visiting Professor of Economics at New York University (1993) and at the Massachusetts Institute of Technology (1989-90).
From 1994 to 1996, Bernanke was the Class of 1926 Professor of Economics and Public Affairs at Princeton University. He was the Howard Harrison and Gabrielle Snyder Beck Professor of Economics and Public Affairs and Chair of the Economics Department at the university from 1996 to 2002. Dr. Bernanke had been a Professor of Economics and Public Affairs at Princeton since 1985.
He was a member of the Board of Governors of the Federal Reserve System from 2002 to 2005; a visiting scholar at the Federal Reserve Banks of Philadelphia (1987-89), Boston (1989-90), and New York (1990-91, 1994-96); and a member of the Academic Advisory Panel at the Federal Reserve Bank of New York (1990-2002).
Bernanke was Chairman of the President's Council of Economic Advisers, from June 2005 to January 2006.
On February 1, 2006, Bernanke took office as Chairman of the Board of Governors of the Federal Reserve System. He began his second term as Federal Reserve Chairman on February 1, 2010. In October 2013, President Barack Obama announced that he had tapped Janet Yellen, the vice chairwoman of the Federal Reserve, to succeed Bernanke when his term finished in January 2014.
Bernanke has published many articles on a wide variety of economic issues, including monetary policy and macroeconomics, and he is the author of several scholarly books and two textbooks. He has held a Guggenheim Fellowship and a Sloan Fellowship, and he is a Fellow of the Econometric Society and of the American Academy of Arts and Sciences. Dr. Bernanke served as the Director of the Monetary Economics Program of the National Bureau of Economic Research (NBER) and as a member of the NBER's Business Cycle Dating Committee. In July 2001, he was appointed Editor of the American Economic Review. Dr. Bernanke's work with civic and professional groups includes having served two terms as a member of the Montgomery Township (N.J.) Board of Education.
In 2022, Bernanke shared the Nobel Prize in economics with Douglas Diamond and Philip Dybvig. The press release announcing the award noted said the winners
have significantly improved our understanding of the role of banks in the economy, particularly during financial crises. An important finding in their research is why avoiding bank collapses is vital. The committee explained:
For the economy to function, savings must be channeled to investments. However, there is a conflict here: savers want instant access to their money in case of unexpected outlays, while businesses and homeowners need to know they will not be forced to repay their loans prematurely. In their theory, Diamond and Dybvig show how banks offer an optimal solution to this problem. By acting as intermediaries that accept deposits from many savers, banks can allow depositors to access their money when they wish, while also offering long-term loans to borrowers.
However, their analysis also showed how the combination of these two activities makes banks vulnerable to rumors about their imminent collapse. If a large number of savers simultaneously run to the bank to withdraw their money, the rumor may become a self-fulfilling prophecy – a bank run occurs and the bank collapses. These dangerous dynamics can be prevented through the government providing deposit insurance and acting as a lender of last resort to banks...
Ben Bernanke analyzed the Great Depression of the 1930s, the worst economic crisis in modern history. Among other things, he showed how bank runs were a decisive factor in the crisis becoming so deep and prolonged. When the banks collapsed, valuable information about borrowers was lost and could not be recreated quickly. Society’s ability to channel savings to productive investments was thus severely diminished.
Bernanke is married and has two children.
Sources: The Federal Reserve.
The Prize in Economic Sciences 2022, Press Release, The Royal Swedish Academy of Sciences, (October 10, 2022).