Hilsenrath Asks "Does Ben Bernanke Deserve A Nobel Prize?"

No, it’s not a joke or sarcasm. The Fed-whispering Jon Hilsenrath has penned the first strawman sponsoring Ben Bernanke for the Nobel Prize…

Via The Wall Street Journal’s Jon Hilsenrath,

It is October, which in the geeky world of academic economics means it is Nobel Prize month, or actually in the case of the economics field, Sveriges-Riksbank-Prize-in-Economic-Sciences-in-Memory-of-Alfred-Nobel month. The prizes start getting announced next week, and as is the custom for this time of year, speculation has started about who will get them.

Thomson Reuters, using academic citations, predicts Phillippe Aghion of Harvard University and Peter Howitt of Brown University will win the prize for work advancing thinking on the idea of “creative destruction.” Others names including William Baumol and Paul Romer of New York University, Jean Tirole of Toulouse School of Economics, and Robert Barro of Harvard are sure to make the rounds in the days ahead.

Purely in the name of being speculative and provocative, here’s another name that warrants some debate: Ben Bernanke. Mr. Bernanke would get attention from the Swedes not for his work as Fed chairman from 2006 to 2014, but for an academic career that pre-dated his stint in government and mapped out links between the financial system and the economy, a subject of great importance today.

Mr. Bernanke’s 1990s “financial accelerator” papers with New York University professor Mark Gertler and Simon Gilchrist presciently drew attention to the damage done to the broader economy by shocks to the credit system.

His research in the 1980s on the Great Depression also proved to be a useful roadmap for how links between the financial system and the economy break down in a crisis.

The work, along with work by others like Douglas Diamond at the University of Chicago’s Booth School of Business, is seen by many academics as being at the leading edge of research in the field. Mr. Bernanke is the 25th most cited economist on the Ideas website hosted by the Federal Reserve Bank of St. Louis, just behind Nobel winner Paul Krugman and ahead of previous Nobel winners including Edward Prescott, Daniel Kahneman and Robert Shiller.

Having led the Fed through a crisis, Mr. Bernanke will forever be a lightning rod for the central bank’s role in the great downturn of 2008. Supporters believe he steered the economy from disaster; critics say the Fed caused the crisis with low interest rates and then took reckless chances after it had happened. Regardless of your view on this question, he has an academic legacy to stand on.