Explain (1) why the Nobel Prize in Economics in 2022 was awarded to Ben Bernanke, Douglas Diamond and Philip Dybvig, and (2) whether/why students studying managerial economics should be especially...

Bernanke's present reputation originates from an article he wrote in 1983 about the 1930s Great Depression. Between January 1930 and March 1933, US industrial production fell 46% and unemployment rose to 25%. The crisis swiftly spread, causing a huge economic collapse over most of the world. Prior to Bernanke's research, it was widely assumed that the financial crisis was driven by the economic downturn, rather than the other way around. However, Bernanke demonstrated that the failure of banks was critical in the recession becoming a severe and prolonged depression. When a bank collapses, the link between the bank and its clients is broken. This relationship contains crucial information that the bank needs to efficiently manage its loans. The bank is familiar...