Ben Bernanke, who led the Fed through economic turmoil, receives 2022 SIEPR Prize
Ben Bernanke, who as chair of the Federal Reserve helped steer the U.S. economy through a global financial crisis and the Great Recession, is this year’s recipient of the SIEPR Prize. He will receive the award during an event hosted at Stanford on Sept. 23.
The Stanford Institute for Economic Policy Research (SIEPR) gives this award every other year to a scholar or policymaker who has deeply influenced economic policy.
“It’s a tremendous honor to recognize Ben Bernanke with the SIEPR Prize,” said Mark Duggan, the Trione Director of SIEPR and the Wayne and Jodi Cooperman Professor of Economics at Stanford. “His policy decisions during and following the 2008 financial crisis and Great Recession brought the U.S. economy through a very dark time and ultimately landed the country in a much better place that clearly benefited everyday Americans and companies both large and small.”
A monetary economist and economic historian on the faculties of the Stanford Graduate School of Business (1979-85) and Princeton University (1985-2002), Bernanke was appointed in 2002 by President George W. Bush to serve as a Federal Reserve governor and later became the chair of Bush’s Council of Economic Advisers. He was tapped by Bush to lead the Fed beginning in 2006—just as the housing crisis was beginning to develop. He was reappointed as Fed chair by President Barack Obama and stayed in the role until early 2014.
As the global financial crisis emerged in the summer of 2007, the Federal Reserve under Bernanke deployed a wide range of novel tools to try to stabilize the system, including providing liquidity to troubled financial firms, lending to nonfinancial borrowers, serving as market-maker of last resort, and making dollars available to world markets.
After Lehman Brothers failed in September 2008 — greatly worsening the crisis — Bernanke collaborated with New York Fed President Timothy Geithner and Treasury Secretary Henry Paulson to recapitalize and stabilize the banking system, using $700 billion in funds appropriated by Congress in the TARP bill.
The financial crisis was controlled by mid-2009, avoiding a possible second Great Depression, and the TARP funds were ultimately paid back. But the economy entered a deep downturn known as the Great Recession.
The Federal Reserve under Bernanke battled the Great Recession, first, by cutting its policy rate nearly to zero and, second, by deploying new policy tools, including large-scale asset purchases (quantitative easing) and explicit forward guidance. The Federal Reserve under Bernanke also worked to increase the institution’s transparency: For example, Bernanke appeared on TV shows like 60 Minutes, the Fed introduced a formal inflation target, and Bernanke began a tradition of regular post-meeting press conferences by the chair.
Since leaving the Fed, Bernanke has been a Distinguished Fellow in Residence with the Economic Studies Program at the Brookings Institution. At Brookings he has published several papers and two books, including The Courage to Act, a memoir of the crisis that made the New York Times bestseller list, and, most recently, a book on the Fed’s past and future entitled Twenty-First Century Monetary Policy.
“When you look at the totality and impact of Ben Bernanke’s career in economic policy, he becomes a clear-cut choice to receive the SIEPR Prize,” said former SIEPR Director John Shoven.
The SIEPR prize was inspired and first funded by George Shultz, who served as President Richard Nixon’s budget director, Secretary of Labor, and Secretary of the Treasury, and later led the State Department during the administration of President Ronald Reagan.
Recipients of the SIEPR Prize are selected by Duggan; Shoven; Monika Piazzesi, a SIEPR Senior Fellow and the Joan Kenney Professor of Economics at Stanford; Jon Levin, a SIEPR Senior Fellow and the Dean of Stanford’s Graduate School of Business; and Jim Poterba, president of the National Bureau of Economic Research.
Since the program’s founding in 2010, the SIEPR Prize has been awarded to Paul Volcker (2010), another former Federal Reserve chair; Martin Feldstein (2012), a Harvard professor and former chair of the President’s Council of Economic Advisers; Stanley Fischer (2014), former governor of the Bank of Israel and vice chair of the Federal Reserve; Alice Rivlin (2016), a former vice chair of the Federal Reserve, director of the White House Office of Management and Budget, and founding director of the Congressional Budget Office; former U.S. Senator Bill Bradley (2018), a key architect of the 1986 federal Tax Reform Act; and Nicholas Stern (2020), the IG Patel Professor of Economics and Government at the London School of Economics and lead author of the influential Stern Review on the Economics of Climate Change.
“I’m honored to receive the SIEPR Prize, joining a distinguished list of recipients,” Bernanke said. “The Prize highlights the importance for practical policymaking of rigorous academic research, of the type that SIEPR is known for.”