Recognized with the 13th Frontiers of Knowledge Award in Economics, American economist Ben Bernanke discusses the financial accelerator, which shows how the deterioration of banks’ and borrowers’ balance sheets worsens recessions by making credit harder to obtain. He relates this idea to monetary policy and to his actions during the 2008 crisis, when he defended stabilizing the financial system as a way to protect the entire economy. He also highlights the progress made in macroprudential regulation since the crisis and the ongoing need to strengthen the oversight of the shadow banking system.
The BBVA Foundation Frontiers of Knowledge Award in the Economics, Finance and Management category has gone in this thirteenth edition to Ben S. Bernanke (The Brookings Institution, Washington DC), Mark Gertler (University of New York), Nobuhiro Kiyotaki (Princeton University) and John Moore (Un
Recognized with the 13th Frontiers of Knowledge Award in Economics, American economist Ben Bernanke discusses the financial accelerator, which shows how the deterioration of banks’ and borrowers’ balance sheets worsens recessions by making credit harder to obtain. He relates this idea to monetary policy and to his actions during the 2008 crisis, when he defended stabilizing the financial system as a way to protect the entire economy. He also highlights the progress made in macroprudential regulation since the crisis and the ongoing need to strengthen the oversight of the shadow banking system.
The BBVA Foundation Frontiers of Knowledge Award in the Economics, Finance and Management category has gone in this thirteenth edition to Ben S. Bernanke (The Brookings Institution, Washington DC), Mark Gertler (University of New York), Nobuhiro Kiyotaki (Princeton University) and John Moore (University of Edinburgh and London School of Economics) “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 above video, committee chair, Eric S. Maskin, Adams University Professor at Harvard University and Nobel Laureate in Economics, reads out the award citation.
00:00 Introduction
00:06 Could you explain the main ideas of the joint work you published with Mark Gertler in 1989, and what it revealed about the amplifiers of the adverse feedback loop between balance sheets and credit cycles?
01:43 Could you explain the interrelation between your first model and monetary policy?
02:46 Do you believe your research provided academic support for the unconventional decisions you made as Chair of the Federal Reserve during the financial crisis?
04:05 Do you think the current COVID crisis will trigger a new financial crisis? What mechanisms do we have to prevent it?
05:10 Have the financial crises of the 21st century led to a paradigm shift in how supervisors should act in the markets?
