Tag: Ben Bernanke

Bank of England to scrap outdated inflation forecasting model in major overhaul after Fed boss’ review

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The exterior of the Bank of England in the City of London, United Kingdom.

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LONDON — The Bank of England on Friday announced a “once in a generation” overhaul of its inflation forecasting following a long-awaited review by former Federal Reserve Chair Ben Bernanke.

The review — initiated after criticism of the central bank’s policymaking amid spiraling inflation — sets out 12 recommendations which BOE Governor Andrew Bailey said the bank was committed to implementing.

Bailey told CNBC it had been “invaluable” to compare and contrast the U.S. policy perspective with its own.

“This is a once in a generation opportunity to update our forecasting, and ensure it is fit for our more uncertain world,” Bailey said.

Bernanke’s recommendations are organized into three key areas: improving the bank’s forecasting infrastructure, supporting decision-making within the Monetary Policy Committee (MPC) and better communicating economic risks to the public.

The provisions include scrapping the bank’s long-held “fan chart” forecasting system and introducing a revamped forecast framework.

The fan chart — which shows a range of possible future data points — has long been used by the bank to present the probability distribution that forms the basis of its inflation forecasts. The model has faced heavy criticism over recent years for failing to accurately keep track of inflationary pressures, and the review concluded that fan charts had “outlived their usefulness” and “should be eliminated.”

Bernanke stopped short of recommending Fed-style “dot plot” forecasting, which was introduced in the U.S. after the global financial crisis to allow each member to chart their course of policy stance, inflation, real GDP and employment. But he suggested a new model which better reflects the differing views of committee members and how inflation expectations can become “de-anchored.”

He also noted that the BOE currently relies more heavily on a central forecast than do other central banks, and said that its analysis should be supplemented with a wider range of alternative scenarios that “help the public better understand the reasons for the policy choice.” Such scenarios may include the effects of different policy choices, or unexpected global shocks.

The suggestion came as part of a wider set of recommendations on how the bank can improve its communications with the public, simplify its policy statement and reduce repetitiveness. The review also said that the bank should move ahead with the current modernization of the software it uses to manage and manipulate data as a “high priority.”

A policymaking overhaul

The Bernanke review was launched last summer to assess the bank’s struggles to accurately project the huge global spike in inflation after Russia’s invasion of Ukraine.

The bank was widely criticized for being too slow to hike interest rates, meaning it subsequently had to raise its main bank rate to a 15-year high of 5.25%.

With inflation now falling faster than the MPC had anticipated, some economists have contended that the bank is committing the same mistake in the opposite direction, by cutting rates too slowly.

Bernanke added that his role chairing the Fed during the global financial crisis highlighted the critical role of monetary policy on the real economy, but added that the review made “no judgment” of the BOE’s recent decision-making.

“The effects of the financial sector on the economy go beyond interest rates. Credibility is important. Risk-taking is important,” he told CNBC.

He also said that the difficulties in forecasting were not unique to the BOE, but added that he hoped the bank would draw appropriate lessons from the experience.

The review recommended that the bank take a phased approach to implementing the new measures, starting with improving its forecasting infrastructure. It should then “cautiously” move on to adopting changes to its policymaking and communications, it said.

Incoming BOE Deputy Governor Clare Lombardelli has been charged with leading the implementation of these recommendations when she takes her seat in July. The bank said it will provide an update on the proposed changes by the end of the year.

— CNBC’s Elliott Smith contributed to this article.

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April 12, 2024
The Fed’s 2% inflation target is a source of growing liberal discontent

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The Federal Reserve’s goal is to get the inflation rate at least near 2% before it begins cutting interest rates.

That’s a formal target backed by written policy, but it’s also the source of growing liberal discontent serving as another form of political pressure on Fed Chair Jerome Powell as he tries to navigate a white-hot election year.

Some on the left want that number to be higher. Some would prefer the Fed add a second target focused on the labor market. And several Democrats used public hearings this past week with Powell to question the target’s origins and why it has so much importance inside the central bank.

“It seems to come from Auckland and from the 1980s” a somewhat disbelieving Rep. Brad Sherman said Wednesday when it was his turn to question Powell.

The liberal stalwart from California was right. The path to 2% began with an off-the-cuff comment in New Zealand in 1988.

The Fed publicly adopted the standard 24 years later, in 2012, in a process that was met with discomfort from the left side of the political spectrum largely because of the lack of a parallel labor market target.

Senator Sherrod Brown, chairman of the Senate Banking Committee, underlined this dynamic Thursday when he suggested Powell move quickly to cut rates “to prevent workers from losing their jobs” and added that “this town too often seems to forget that maximum employment is part of the Fed’s dual mandate.”

The Fed doesn’t have a numeric labor target even though its dual mandate requires it to aim for both stable prices and maximum employment.

Its inflation target is key because of how rate cuts are decided. Powell and other Fed officials have made it clear they won’t start lowering the benchmark rate from its 22-year high until they are confident inflation is moving down “sustainably” to 2%.

And Powell strongly signaled this week that the 2% inflation target isn’t going anywhere. He mentioned it seven different times within the span of his five-minute-long opening remarks before lawmakers on both Wednesday and Thursday.

He also acknowledged its Kiwi origins in response to Sherman’s questioning but added that “2% has become the global standard, it’s a pretty durable standard.” He reinforced his belief that it wouldn’t be a problem for the US to achieve the 2% level in the months ahead.

“People are always talking about this,” said Preston Mui, who is with a labor market-focused group called Employ America. Changing the target by moving it even higher to 3% “is probably not something that’s politically in the cards for the Fed at all right now.”

But talking about the number has nonetheless “caused a lot of headaches for Powell over the last two to three years,” Mui added.

How the Fed got here

The path to the Fed’s 2% inflation target was a winding one that began with an interview that is now infamous in central banking circles.

Don Brash, who was governor of New Zealand’s Reserve Bank, offered an off-the-cuff comment in 1988 that he wanted an inflation rate between 0 and 1%. That set off a policy-making process and led his nation to adopt a formal 2% target soon thereafter.

Other central banks followed and the moves were criticized from some quarters as being too inflation-focused.

Perhaps the most colorful takedown came from Mervyn King, a British economist who served as governor of the Bank of England. He said in 1997 that he worried a hyper-focus on price targets would lead to central bankers becoming “inflation nutters.”

Don Brash, then the governor of the Reserve Bank Of New Zealand, during a press conference. (Robert Patterson/Getty Images) (Robert Patterson via Getty Images)

The Federal Reserve, under Alan Greenspan at the time, was resistant to a public embrace of the idea but debated it throughout the 1990s and early 2000s.

“If you read FOMC transcripts around inflation targeting it’s a concern,” said Federal Reserve historian Sarah Binder of political considerations in a recent interview.

There was resistance to implementing it during a 2008 downturn, with Ben Bernanke in charge. There was concern among Fed governors that “we’ve got to be worried about pushback from Democrats,” Binder said.

But by 2012, with a recession in the rearview mirror and Bernanke in his second term as chair, the Fed pivoted and a 2% target was publicly adopted.

Bernanke argued in his memoir that a 2% target increases business and consumer confidence and therefore gives the bank more flexibility to address both sides of its dual mandate.

It’s an argument that is still used today, with an explainer on the Fed’s website saying the 2% target “is most consistent with the Federal Reserve’s mandate for maximum employment and price stability.”

But many on the left were never fully on board. Bernanke acknowledged in his memoir that a main liberal voice of that era — Rep. Barney Frank of Massachusetts — brought up the lack of parallel labor market target and “wasn’t completely comfortable” with the policy even if he went along with it in the end.

It’s a critique that has persisted for years.

“I think it should be higher than that,” Rep. Maxine Waters said of the 2% target in an interview with Yahoo Finance’s Jennifer Schonberger this week, saying an increase would help support working families.

Rakeen Mabud, the chief economist at the left-leaning group Groundwork Collaborative, put a finer point on it, saying the target “codifies the fact that inflation is just more important to the Fed than unemployment is.”

The ongoing critique is further contextualized by a 2020 move at the Fed to adopt a flexible average inflation targeting framework. In effect, the change made 2% into a less rigid target by allowing the Fed to look at 2% as an average and allows inflation to run slightly hotter for stretches.

Republicans appear inclined to return to the harder pre-2020 target, with some quarters of the GOP eager to remove employment from the Fed’s dual mandate entirely.

The policy will be under review, Powell said this week, beginning later this year and through the end of 2025.

Why it won’t be so easy to change

The 2% target could grow as an issue in the months ahead, with many Democrats continuing to call for rate cuts even as forecasts have dropped throughout the early months of 2024. Some in the financial world are even predicting zero cuts all year.

“Interest rates are too damn high,” Congresswoman Ayanna Pressley of Massachusetts told Powell.

Another issue for the left is that simply adding a corollary target focused on the unemployment rate — which ticked up to 3.9% in the February jobs report — is not necessarily as easy as it might sound.

Mui, the senior economist at Employ America, said his group is focused on more nuanced measures like the prime age employment rate — the number of younger people working against their overall population — or wage growth or quit rates or overall labor force participation.

“I think if there was this rigid commitment to defining an unemployment target, there’s actually a risk [in some scenarios] that it actually doesn’t pay enough attention to that side of their mandate,” he says.

Ben Werschkul is Washington correspondent for Yahoo Finance.

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March 10, 2024
Fed officials less confident on the need for more rate hikes, minutes show

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Federal Reserve officials were divided at their last meeting over where to go with interest rates, with some members seeing the need for more increases while others expected a slowdown in growth to remove the need to tighten further, minutes released Wednesday showed.

Though the decision to increase the Fed’s benchmark rate by a quarter percentage point was unanimous, the meeting summary reflected disagreement over what the next move should be, with a tilt toward less aggressive policy.

At the end, the rate-setting Federal Open Market Committee voted to remove a key phrase from their post-meeting statement that had indicated “additional policy firming may be appropriate.”

The Fed appears now to be moving toward a more data-dependent approach in which myriad factors will determine if the rate-hiking cycle continues.

“Participants generally expressed uncertainty about how much more policy tightening may be appropriate,” the minutes stated. “Many participants focused on the need to retain optionality after this meeting.”

Essentially, the debate came down to two scenarios.

One that was advocated by “some” members judged that progress in reducing inflation was “unacceptably slow” and would necessitate further hikes. The other, backed by “several” FOMC members, saw slowing economic growth in which “further policy firming after this meeting may not be necessary.”

The minutes do not identify individual members nor do they quantify “some” or “several” with specific numbers. However, in Fed parlance, “some” is thought to be more than “several.” The minutes noted, that members concurred inflation is “substantially elevated” relative to the Fed’s goal.

‘Closely Monitoring Incoming Information’

While the future expectations differed, there appeared to be strong agreement that a path in which the Fed has hiked rates 10 times for a total of 5 percentage points since March 2022 is no longer as certain.

“In light of the prominent risks to the Committee’s objectives with respect to both maximum employment and price stability, participants generally noted the importance of closely monitoring incoming information and its implications for the economic outlook,” the document stated.

FOMC officials also spent some time discussing the problems in the banking industry that have seen multiple medium-sized institutions shuttered. The minutes noted that members are at the ready to use their tools to make sure the financial system has enough liquidity to cover its needs.

At the March meeting, Fed economists had noted that the expected credit contraction from the banking stresses likely would tip the economy into recession.

They repeated that assertion at the May meeting, though they noted that if the credit tightness abated that would be an upside risk for economic growth. The minutes noted that the scenario for less impact from banking is “viewed as only a little less likely than the baseline.”

Markets betting May was last hike

Release of the minutes comes amid disparate public statements from officials on where the Fed should go from here.

Markets expect that the May rate hike will be the last of this cycle, and that the Fed could reduce rates by about a quarter percentage point before the end of the year, according to futures market pricing. That expectation comes with the assumption that the economy will slow and perhaps tip into recession while inflation comes down closer to the Fed’s 2% target.

However, virtually all officials have expressed skepticism if not outright dismissiveness towards the likelihood of a cut this year.

Most recently, Governor Christopher Waller said in a speech Wednesday that while the data haven’t presented a clear case for the June rate decision, he’s inclined to think that more hikes will be needed to bring down stubbornly high inflation.

“I do not expect the data coming in over the next couple of months will make it clear that we have reached the terminal rate,” Waller said, referring to the end-point for hiking. “And I do not support stopping rate hikes unless we get clear evidence that inflation is moving down towards our 2% objective. But whether we should hike or skip at the June meeting will depend on how the data come in over the next three weeks.”

Chair Jerome Powell weighed in last week, providing little indication he ‘s thinking about rate cuts though he said that the banking issues could negate the need for increases.

Economic reports have shown that inflation is tracking lower though it remains well above the central bank’s goals. Core inflation as measured by the Fed’s preferred personal consumption expenditures index increased 4.6% on an annual basis in March, a level it has hovered around for months.

A bustling labor market has kept the pressure on prices, with a 3.4% unemployment rate that ties a low going back to the 1950s. Wages have been rising as well, up 4.4% from a year ago in April, and a research paper this week from former Fed Chairman Ben Bernanke said the trend represents the next phase in the inflation fight for his former colleagues.

As for the broader economy, purchase managers indexes from S&P Global hit a 13-month high in May, indicating that while recession could be a story later in the year, there are few signs of a contraction now. The Atlanta Fed’s GDPNow tracker of economic data shows growth at a 2.9% annualized pace in the second quarter.

Correction: In Fed parlance, “some” is thought to be more than “several.” An earlier version misstated the difference.

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May 24, 2023
How the Fed affects the stock market

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When members of the Federal Reserve make public statements, investors tend to listen. Over the past two decades, central bankers have consistently shared key information about the future trajectory of important inputs like interest rates. The Fed’s forward guidance on interest rates amid historic inflation has taken stock markets for a ride in 2022. As investors wait for a pivot, a panel of experts explains why many in the market choose not to fight the Fed.

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December 22, 2022
Ben Bernanke awarded the Nobel Prize | 60 Minutes

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Ben Bernanke awarded the Nobel Prize | 60 Minutes – CBS News

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On Monday, former Federal Reserve Chair Ben Bernanke was awarded the Nobel Prize in Economic Sciences.
In 2009, Bernanke told 60 Minutes, “The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis.”

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October 16, 2022
10/16/2022: The Lost Souls of Bucha, The Power of Grimsby, Coach Prime

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10/16/2022: The Lost Souls of Bucha, The Power of Grimsby, Coach Prime – CBS News

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Stories of civilians killed in Bucha, Ukraine; The largest offshore wind farm in the world; How Deion Sanders is changing the future of college football at Jackson State.

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October 16, 2022
The econ Nobel offers a timely warning about central banks’ power | CNN Business

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This story is part of CNN Business’ Nightcap newsletter. To get it in your inbox, sign up for free, here.

New York
CNN Business
—

The Nobel in economics is sort of the step-cousin of the Nobel family.

It came about nearly 70 years after its literature and sciences counterparts, in 1969, and is technically called the “Sveriges Riksbank Prize in Economic Sciences.” It is awarded by the Swedish central bank, in honor of the namesake renaissance man Alfred Nobel who established the prizes.

Some scholars really dislike the economics prize, including one of Nobel’s own descendants, who dismissed it as a “PR coup by economists.”

But hey, it still comes with a cash prize. And it’s also pretty useful in reminding the world that economics as an academic field is, frankly, a barely understood hodge-podge of studies that is constantly evolving and so variable it’s almost useless outside of academia. (And I mean that with the utmost respect to economists, who, not unlike journalists, knew what they were doing when they chose their life of suffering.)

Here’s the thing: Ben Bernanke, the former Federal Reserve chairman who guided the US economy through the 2008 financial crisis and subsequent recession, was awarded the Nobel in economics along with two other economists, Douglas Diamond and Philip Dybvig. (Congrats to all the winners, with apologies to Doug and Phil, who will forever be referred to in headlines about the Nobel as “and two other economists.”)

Bernanke, who previously taught at Princeton and earned his Ph.D from MIT, received the award for his research on the Great Depression. In short, his work demonstrates that banks’ failures are often a cause, not merely a consequence, of financial crises.

That was groundbreaking when he published it in 1983. Today, it’s conventional wisdom.

WHY IT MATTERS

The timing is everything here. The Nobel committee has been known to play politics (see: that time Barack Obama was awarded the Nobel Peace Prize after being in office for just eight months). And right now, it is using its spotlight to call attention to the high-stakes gamble playing out at central banks around the world, most notably the Fed.

The rapid run-up in interest rates, led by the US central bank, is causing markets around the world to go haywire. And it’s especially bad news for emerging economies.

Monetary tightening — especially when it is aggressive and synchronized across major economies — could inflict worse damage globally than the 2008 financial crisis and the 2020 pandemic, a United Nations agency warned earlier this month. It called the Fed’s policy “imprudent gamble” with the lives of those less fortunate.

LESSONS FROM HISTORY

On Monday, Diamond, one of the three newly minted Nobel laureates, acknowledged that the rate moves around the world were causing market instability.

But he believes the system is more resilient than it used to be because of hard lessons learned from the 2008 crash, my colleague Julia Horowitz reports.

“Recent memories of that crisis and improvements in regulatory policies around the world have left the system much, much less vulnerable,” Diamond said.

Let’s hope he’s right.

Oh hey, speaking of the Fed inflicting pain: We’re about to see big job losses, according to Bank of America.

Under the rate hikes imposed by Jay Powell & Co, the US economy could see job growth cut in half during the fourth quarter of this year. Early next year, the bank expects to see losses of about 175,000 jobs a month.

The litigation between Elon Musk and Twitter is officially on hold. The two sides now have until October 28 to work out a deal or once again gear up for a courtroom battle.

The big question now is all about the money.

Here’s the deal: Not even the world’s richest person has this kind of cash just lying around. Musk’s wealth is tied up in Tesla stock, which he can’t easily offload for a whole bunch of reasons. He needs to borrow the money, which means he’s got to get banks to pony up.

By most accounts, he’ll be able to make it happen. But the Twitter deal is a harder pitch to make now than it was back in April, when Musk said he’d lined up more than $46 billion in financing, including two debt commitment letters from Morgan Stanley and other unnamed financial institutions, my colleague Clare Duffy writes.

Musk has spent the past several months trashing Twitter as he sought to renege on his offer. Meanwhile, tech stocks have been hammered, ad revenues are declining, and the global economy has inched closer to a recession, sapping investor appetite for risk.

Musk’s legal team said last week the banks that had committed debt financing previously were “working cooperatively to fund the close.”

Twitter is, understandably, skeptical, given the many curve balls Musk has thrown at them since he got involved with the company earlier this year. The company raised concerns last week that a representative for one of the banks testified that Musk had not yet sent a borrowing notice and “has not otherwise communicated to them that he intends to close the transaction, let alone on any particular timeline.”

What’s Musk’s endgame?

No one knows, perhaps least of all Musk. But many legal experts following the case say Musk understood he’d likely lose at trial and then be forced to buy Twitter anyway. He’d rather buy the entire company than be deposed by Twitter’s lawyers and do further damage to Twitter in a trial.

And the banks may not be able to walk away even if they want to.

“The only way they could get out of it is to claim a material adverse effect and that Twitter has changed so much since they agreed to the deal that they no longer want to finance the deal,” said George Geis, professor of strategy at the UCLA Anderson School of Management.

Even if the banks succeeded there, Musk may not be off the hook. The judge in the case could rule that Musk was at fault for the financing falling through — not a far-fetched notion after all the trash-talking — and order him to sue Morgan Stanley to provide the funds or close the deal without it.

Bottom line, it seems like Musk will end up owning Twitter one way or another. And given his only vague musings about what he’d actually do with it, there are a whole host of unknowns lurking in Twitter’s future.

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October 10, 2022
Nobel economics prize awarded to U.S.-based economists including Bernanke for work on financial crises

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Ben Bernanke, former chairman of the U.S. Federal Reserve, speaks during the American Economic Association and Allied Social Science Association Annual Meeting on Friday, Jan. 4, 2019. Bernanke is one of three winners of the 2022 Nobel prize in economics.

Bloomberg | Bloomberg | Getty Images

U.S.-based economists Ben Bernanke, Douglas Diamond and Philip Dybvig were awarded the Nobel prize in economic sciences for 2022 for their research on banks and financial crises.

Bernanke was chairman of the Federal Reserve from 2006 to 2014 and is now at the Brookings Institute in Washington, D.C. Diamond is a professor at the University of Chicago Booth School of Business, and Dybvig is a professor at the Olin Business School of Washington University in St. Louis.

The Nobel committee said their work in the early 1980s had “significantly improved our understanding of the role of banks in the economy, particularly during financial crises,” and in showing why it is vital to avoid bank collapses. They added this was “invaluable” during the 2008-09 financial crisis and the coronavirus pandemic.

Bernanke’s analysis of the Great Depression in the 1930s showed how and why bank runs were a major reason the crisis was so long and severe. Diamond and Dybvig’s work, meanwhile, looked at the socially important role banks play in smoothing the potential conflict between savers wanting access to their money and the economy needing savings to be put into investments; and how governments can help prevent bank runs by providing deposit insurance and acting as a lender of last resort.

The winners of the prize — officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel — receive 10 million Swedish krona ($883,000) each.

The Royal Swedish Academy of Sciences select the winners from a list of candidates recommended by the Economic Sciences Prize Committee. This makes its selection from names submitted by around 3,000 professors, previous winners and academy members by invitation. People cannot nominate themselves.

In a press conference following the announcement, Diamond was asked whether he had any warning for banks, institutions and governments given current rising interest rates and predictions of an economic slowdown.

Diamond said: “Financial crises, in the way that Phil Dybvig and I think about them, become worse when people start to lose faith in the stability of the system. And that is all related to basically how profitable they think the banking sector is, in addition to being stable.”

“So in periods when things happen unexpectedly, like I think people are surprised how quickly nominal interest rates have gone up around the world, that can be something that sets off some fears in the system. We saw some of this in the United Kingdom in their liability-driven sector of the insurance market.”

“So I guess the best advice is to be prepared for making sure that your part of the banking sector is both perceived to be healthy and to stay healthy and to respond in a measured and transparent way to changes in monetary policy.”

Asked about whether he foresaw another financial crisis, he said the world was “much better prepared” than in 2008, and regulatory improvements had made the system less vulnerable.

“The banking sector itself is in very solid shape, good net worth, good risk management,” he said. “The problem is that these vulnerabilities of the fear of runs and dislocations and crises can show up anywhere, not just commercial banks.”

The insight he and Dybvig had tried to provide, he said, was that it is crucial to be able to issue short-term, liquid liabilities, like deposits or shares, which are more liquid than underlying assets. He again cited the insurance sector in the U.K., when he said the “mismatch” came when there were calls for more collateral from insurance companies. The Bank of England has been forced to intervene to reduce market turmoil and protect pension funds following a controversial government budget.

Last year, the economics prize was split three ways. It went to David Card, for his work on labor economics; and Joshua D. Angrist and Guido W. Imbens for their contributions to the analysis of causal relationships.

Unlike the five other Nobel prizes, which have been handed out since 1901 and were bestowed in the will of Swedish inventor, chemist and engineer Alfred Nobel, the economics award was established in 1969 by Sweden’s central bank in his honor. It is the last to be announced each year.

The renowned Nobel Peace Prize was awarded Friday to Belarusian human rights activist Ales Bialiatski, Russian human rights organization Memorial and the Ukrainian NGO Center for Civil Liberties.

This year’s prize for physics went to Alain Aspect, John Francis Clauser and Anton Zeilinger, for discoveries in quantum mechanics. The Nobel committee said they had used “groundbreaking experiments” investigating particles in entangled states to begin a new era of quantum technology.

The chemistry prize was split between Carolyn R. Bertozzi, for her work using click and bioorthogonal chemistry to map cells and develop more targeted cancer treatments; and Morten Meldal and K. Barry Sharpless, who the committee said “laid the foundations of click chemistry,” which involves connecting biocompatible molecules.

The medicine prize was awarded to Svante Paabo “for his discoveries concerning the genomes of extinct hominins and human evolution.”

The prize for literature went to French author Annie Ernaux.

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October 10, 2022
Nobel Prize in economics goes to a former Fed chair and two other U.S.-based economists

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Ben Bernanke, former chairman of the U.S. Federal Reserve, speaking during the American Economic Association and Allied Social Science Association Annual Meeting in Atlanta on Jan. 4, 2019.

Elijah Nouvelage / Bloomberg via Getty Images

Stockholm — This year’s Nobel Prize in economic sciences has been awarded to the former chair of the U.S. Federal Reserve Board, Ben S. Bernanke, and two U.S.-based economists, Douglas W. Diamond and Philip H. Dybvig, “for research on banks and financial crises.”

The prize was announced Monday by the Nobel panel at the Royal Swedish Academy of Sciences in Stockholm.

The committee said their work had shown in their research “why avoiding bank collapses is vital.”

Nobel prizes carry a cash award of 10 million Swedish kronor (nearly $900,000) and will be handed out on Dec. 10.

Unlike the other prizes, the economics award wasn’t established in Alfred Nobel’s will of 1895 but by the Swedish central bank in his memory. The first winner was selected in 1969.

Last year, half of the award went to David Card for his research on how the minimum wage, immigration and education affect the labor market. The other half was shared by Joshua Angrist and Guido Imbens for proposing how to study issues that don’t easily fit traditional scientific methods.

A week of Nobel Prize announcements kicked off Oct. 3 with Swedish scientist Svante Paabo receiving the award in medicine for unlocking secrets of Neanderthal DNA that provided key insights into our immune system.

Three scientists jointly won the prize in physics Tuesday. Frenchman Alain Aspect, American John F. Clauser and Austrian Anton Zeilinger had shown that tiny particles can retain a connection with each other even when separated, a phenomenon known as quantum entanglement, that can be used for specialized computing and to encrypt information.

The Nobel Prize in chemistry was awarded Wednesday to Americans Carolyn R. Bertozzi and K. Barry Sharpless, and Danish scientist Morten Meldal for developing a way of “snapping molecules together” that can be used to explore cells, map DNA and design drugs that can target diseases such as cancer more precisely.

French author Annie Ernaux won this year’s Nobel Prize in literature Thursday. The panel commended her for blending fiction and autobiography in books that fearlessly mine her experiences as a working-class woman to explore life in France since the 1940s.

The Nobel Peace Prize went to jailed Belarus human rights activist Ales Bialiatski, the Russian group Memorial and the Ukrainian organization Center for Civil Liberties on Friday.

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October 10, 2022