Stockholm: American economist Ben S. Bernanke, Douglas W. Diamond, Philip H. Dybvig is the recipient of this year's Nobel Prize in Economics.

The trio including Former Federal Reserve chief Ben Bernanke won this year's Nobel Economics Prize on Monday for laying the foundation of how the world now manages global crises like the recent pandemic or the Great Recession of 2008.

Governments around the world bailed out banks in 2008 and 2009, generating a torrent of criticism as ordinary consumers suffered with many losing their homes even as banks, a key culprit of the crisis, were saved.

But society on the whole benefited, the laureates' research suggests.

"Even though these bailouts have problems, ... they could actually be good for society," Diamond told a news conference with the Swedish Academy, arguing that preventing the collapse of a financial firm like Lehman Brothers would have made the crisis less severe.

The Nobel panel said that Ben Bernanke, Douglas Diamond and Philip Dybwig improved the understanding of the role of banks in the economy and how to regulate financial markets in times of financial crisis.

Their research demonstrated the importance of avoiding bank failure. Diamond's research illustrates how banks perform socially important functions.

Ben Bernanke uses statistics and historical sources to explain how banks fail when investors withdraw their money en masse.
The prize money of Rs 23.85 crore (10 million Swedish kroner) will be handed over on December 10.