“Small temporary (financial) shocks, positive or negative, create persistent and amplified long-term effects on the economy as a whole.”

Awarded the 13th Frontiers of Knowledge Award in Economics, John Moore reflects on how contract, incentive, and credit issues determine the functioning of markets. His models explain why financing can be constrained and how these constraints affect output and growth.

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.