STOCKHOLM: A trio of US economists including former Federal Reserve Chair Ben Bernanke won this year’s Nobel Economics Prize on Monday for laying the foundation of how world powers now tackle global crises like the recent pandemic or the Great Recession of 2008.

The trio, who also include Douglas Diamond and Philip Dybvig, won for their research on how regulating banks and propping up failing lenders with public cash can stave off an even deeper economic crisis, such as the Great Depression of the 1930s.

“The actions taken by central banks and financial regulators around the world in confronting two recent major crises – the Great Recession and the economic downturn that was generated by the COVID-19 pandemic – were in large part motivated by the laureates’ research,” the Swedish Academy said in announcing this year’s prize winners.

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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 and the bailouts, even if morally questionable to some, likely prevented more pain, the laureates’ research suggests.