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IMAGE: Ben Bernanke, Mark Gertler, Nobuhiro Kiyotaki, and John Moore, winners of the BBVA Foundation Frontiers of Knowledge Award in Economics.
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Credit: BBVA FOUNDATION
The BBVA Foundation Frontiers of Knowledge Award in the Economics, Finance and Management category has gone in this thirteenth edition to Ben Bernanke (The Brookings Institution, Washington DC), Mark Gertler (University of New York), Nobuhiro Kiyotaki (Princeton University) and John Moore (University of Edinburgh) "for fundamental contributions to our understanding of how financial market imperfections can amplify macroeconomic fluctuations and generate deep macroeconomic recessions," in the words of the award citation.
"In the last 15 years," says the committee, "advanced economies have been hit by large macroeconomic shocks arising from the financial side. By 2008, fuelled by the liquidity glut stemming from emerging countries and by lax prudential supervision, many financial institutions of advanced economies had pursued a short-term-profit strategy and taken large risks: investing in real-estate bubbles, borrowing short on financial markets, getting exposed to poorly capitalized players, and so on. The governments and the central banks had to rescue a financial sector that was about to implode and would have been unable to perform its core functions: serve retail depositors, lend to small and medium enterprises, and run a smooth payment system."