Douglas Warren Diamond (born October 25, 1953) is an American economist. He is currently the Merton H. Miller Distinguished Service Professor of Finance at the

University of Chicago The University of Chicago (UChicago, Chicago, U of C, or UChi) is a private research university in Chicago, Illinois. Its main campus is located in Chicago's Hyde Park neighborhood. The University of Chicago is consistently ranked among the b ...

Booth School of Business The University of Chicago Booth School of Business (Chicago Booth or Booth) is the graduate business school of the University of Chicago. Founded in 1898, Chicago Booth is the second-oldest business school in the U.S. and is associated with 10 N ...

, where he has taught since 1979. Diamond specializes in the study of

financial intermediaries A financial intermediary is an institution or individual that serves as a middleman among diverse parties in order to facilitate financial transactions. Common types include commercial banks, investment banks, stockbrokers, pooled investment funds ...

financial crises A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and man ...

, and

liquidity Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include: * Market liquidity, the ease with which an asset can be sold * Accounting liquidity, the ability to meet cash obligations when due * Liqui ...

. He is a former president of the American Finance Association (2003) and the

Western Finance Association The Western Finance Association (WFA) is an international professional society for academicians and practitioners with a scholarly interest in the development and application of research in finance. Its purpose is: *to serve as a focal point for c ...

(2001-02). In October 2022, Diamond was awarded the

Nobel Memorial Prize in Economic Sciences The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...

jointly with

Ben Bernanke Ben Shalom Bernanke ( ; born December 13, 1953) is an American economist who served as the 14th chairman of the Federal Reserve from 2006 to 2014. After leaving the Fed, he was appointed a distinguished fellow at the Brookings Institution. Durin ...

and

Philip H. Dybvig Philip Hallen Dybvig (born May 22, 1955) is an American economist. He is the Boatmen's Bancshares Professor of Banking and Finance at the Olin Business School of Washington University in St. Louis. Career Dybvig specializes in asset pricing, b ...

. The prize was awarded in recognition of the economists' "research on banks and financial crises" Diamond is best known for his work on financial crises and

bank run A bank run or run on the bank occurs when many clients withdraw their money from a bank, because they believe the bank may cease to function in the near future. In other words, it is when, in a fractional-reserve banking system (where banks no ...

s, particularly the influential

Diamond–Dybvig model The Diamond–Dybvig model is an influential model of bank runs and related financial crises. The model shows how banks' mix of illiquid assets (such as business or mortgage loans) and liquid liabilities (deposits which may be withdrawn at any t ...

published in 1983 and the Diamond

model A model is an informative representation of an object, person or system. The term originally denoted the plans of a building in late 16th-century English, and derived via French and Italian ultimately from Latin ''modulus'', a measure. Models c ...

delegated monitoring Delegate or delegates may refer to: * Delegate, New South Wales, a town in Australia * Delegate (CLI), a computer programming technique * Delegate (American politics), a representative in any of various political organizations * Delegate (United ...

published in 1984. In 2016, he was awarded the

CME Group CME Group Inc. (Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, The Commodity Exchange) is an American global markets company. It is the world's largest financial derivatives exchange, and trades in asset class ...

- MSRI Prize in Innovative Quantitative Applications.Douglas Diamond to receive CME Group-MSRI Prize in Innovative Quantitative Applications Retrieved on March 24, 2016.
/ref>

Early life and education

Douglas Warren Diamond was born on October 25, 1953. He was raised in the

Hyde Park Hyde Park may refer to: Places England * Hyde Park, London, a Royal Park in Central London * Hyde Park, Leeds, an inner-city area of north-west Leeds * Hyde Park, Sheffield, district of Sheffield * Hyde Park, in Hyde, Greater Manchester Austra ...

neighborhood of

Chicago (''City in a Garden''); I Will , image_map = , map_caption = Interactive Map of Chicago , coordinates = , coordinates_footnotes = , subdivision_type = Country , subdivision_name ...

by a single mother. As an adolescent, Diamond originally intended to study molecular biology. Diamond matriculated at

Brown University Brown University is a private research university in Providence, Rhode Island. Brown is the seventh-oldest institution of higher education in the United States, founded in 1764 as the College in the English Colony of Rhode Island and Providenc ...

, where he decided to study economics instead, after taking a course on

Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the ...

and

Anna Schwartz Anna Jacobson Schwartz (pronounced ; November 11, 1915 – June 21, 2012) was an American economist who worked at the National Bureau of Economic Research in New York City and a writer for ''The New York Times''. Paul Krugman has said that Schwar ...

's ''

A Monetary History of the United States ''A Monetary History of the United States, 1867–1960'' is a book written in 1963 by Nobel Prize–winning economist Milton Friedman and Anna J. Schwartz. It uses historical time series and economic analysis to argue the then-novel proposition th ...

''. He graduated

Phi Beta Kappa The Phi Beta Kappa Society () is the oldest academic honor society in the United States, and the most prestigious, due in part to its long history and academic selectivity. Phi Beta Kappa aims to promote and advocate excellence in the liberal a ...

from Brown with a Bachelor of Arts degree in economics in 1975. The following year, and in 1977 Diamond earned Master's degrees, and ultimately a PhD in economics in 1980 from

Yale University Yale University is a private research university in New Haven, Connecticut. Established in 1701 as the Collegiate School, it is the third-oldest institution of higher education in the United States and among the most prestigious in the wo ...

. At Yale, both Diamond and future Nobel co-recipient Philip H. Dybvig were advised by

Stephen A. Ross Stephen Alan "Steve" Ross (February 3, 1944 – March 3, 2017) was the inaugural Franco Modigliani Professor of Financial Economics at the MIT Sloan School of Management after a long career as the Sterling Professor of Economics and Finance a ...

. According to Diamond, the two would regularly converse outside Ross' office while waiting for appointments with him. A later version of the third chapter of Diamond's 1980 doctoral dissertation "Essays on Information and Financial Intermediation" was republished in 1984 in ''

The Review of Economic Studies ''The Review of Economic Studies'' (also known as ''REStud'') is a quarterly peer-reviewed academic journal covering economics. It was established in 1933 by a group of economists based in Britain and the United States. The original editorial tea ...

'' under the title "Financial Intermediation and Delegated Monitoring" This publication coined the term "delegated monitoring" and described Diamond's formal model of delegated monitoring. According to the Committee for the Nobel Memorial Prize in Economic Sciences, Diamond's model is considered "the first truly micro-founded theory of financial intermediation." Since its publication, Diamond (1984) has become a key publication in scholarship concerning financial intermediation.

Career

Since 1979, Diamond has taught at the University of Chicago Booth School of Business . He has held the Merton H. Miller Distinguished Service Professorship since July 2000, having previously held the

Theodore O. Yntema Theodore Otte Yntema (1900 – September 18, 1985) was an American economist specializing in the field of quantitative analysis in finance. Education Yntema graduated summa cum laude in 1921 from Hope College as valedictorian. in 1922, he rece ...

Professorship. From 2010 to 2014, Diamond directed the Fama-Miller Center for Research in Finance at the University of Chicago. Diamond has additionally served as a visiting scholar at the

University of Bonn The Rhenish Friedrich Wilhelm University of Bonn (german: Rheinische Friedrich-Wilhelms-Universität Bonn) is a public research university located in Bonn, North Rhine-Westphalia, Germany. It was founded in its present form as the ( en, Rhine U ...

(1983) and the

Bank of Japan The is the central bank of Japan.Louis Frédéric, Nussbaum, Louis Frédéric. (2005). "Nihon Ginkō" in The bank is often called for short. It has its headquarters in Chūō, Tokyo, Chūō, Tokyo. History Like most modern Japanese instituti ...

(1999), as visiting professor at the

Hong Kong University of Science and Technology The Hong Kong University of Science and Technology (HKUST) is a public research university in Clear Water Bay Peninsula, New Territories, Hong Kong. Founded in 1991 by the British Hong Kong Government, it was the territory's third institution ...

and

MIT Sloan School of Management The MIT Sloan School of Management (MIT Sloan or Sloan) is the business school of the Massachusetts Institute of Technology, a private university in Cambridge, Massachusetts. MIT Sloan offers bachelor's, master's, and doctoral degree programs, ...

, and as a professor and teaching fellow at the

Yale School of Management The Yale School of Management (also known as Yale SOM) is the graduate business school of Yale University, a private research university in New Haven, Connecticut. The school awards the Master of Business Administration (MBA), MBA for Executives ...

Nobel Memorial Prize in Economics

In the early 2010s, Diamond was repeatedly floated as a contender for the Nobel Memorial Prize in Economic Sciences. In 2011, Diamond was listed by

Thomson Reuters Thomson Reuters Corporation ( ) is a Canadian multinational media conglomerate. The company was founded in Toronto, Ontario, Canada, where it is headquartered at the Bay Adelaide Centre. Thomson Reuters was created by the Thomson Corpora ...

as one of the "researchers likely to be in contention for Nobel honors based on the citation impact of their published research."Runners and riders. Retrieved on March 24, 2016.
/ref> He was again named as a contender for the prize in 2013 by economist Hubert Fromlet, ''

The Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...

,'' and

Catherine Rampell Catherine Chelsea Rampell (born November 4, 1984) is an American opinion journalist and nationally syndicated opinion columnist. Early life and education Rampell grew up in a Jewish family in South Florida, the daughter of Ellen (née Kahn), an ...

, writing for ''

The New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...

.'' On October 10, 2022, Diamond received the Nobel Memorial Prize in Economic Sciences jointly with long-time collaborator Philip H. Dybvig and former

Chair of the Federal Reserve The chair of the Board of Governors of the Federal Reserve System is the head of the Federal Reserve, and is the active executive officer of the Board of Governors of the Federal Reserve System. The chair shall preside at the meetings of the Boa ...

, Ben Bernanke. Much of the work for which the prize was awarded stems from work Diamond and Dybvig published in the early and mid-1980s.

Personal life

Diamond has been married to Elizabeth Cammack Diamond since 1982. The couple has two children. He is the son of Leon Diamond, a psychiatrist, and Margaret Gunkel Seehafer, a social worker and professor.

Honors and awards

* Fellow,

Econometric Society The Econometric Society is an international society of academic economists interested in applying statistical tools to their field. It is an independent organization with no connections to societies of professional mathematicians or statisticians. ...

(since 1990) * Member,

American Academy of Arts and Sciences The American Academy of Arts and Sciences (abbreviation: AAA&S) is one of the oldest learned societies in the United States. It was founded in 1780 during the American Revolution by John Adams, John Hancock, James Bowdoin, Andrew Oliver, and ...

(elected 2001) * Fellow,

American Finance Association The American Finance Association (AFA) is an academic organization whose focus is the study and promotion of knowledge of financial economics. It was formed in 1939. Its main publication, the ''Journal of Finance'', was first published in 1946. ...

(selected 2004) * Economic Theory Fellow,

Society for the Advancement of Economic Theory The Society for the Advancement of Economic Theory abbreviated as SAET is a non-profit membership society founded to "advance knowledge in theoretical economics and to facilitate communication among researchers in economics, mathematics, game theor ...

(2016) * Member,

National Academy of Sciences The National Academy of Sciences (NAS) is a United States nonprofit, non-governmental organization. NAS is part of the National Academies of Sciences, Engineering, and Medicine, along with the National Academy of Engineering (NAE) and the Nati ...

(elected 2017)

Awards

* Morgan Stanley-American Finance Association Award for Excellence in Finance, 2012 *

Doctor Honoris Causa An honorary degree is an academic degree for which a university (or other degree-awarding institution) has waived all of the usual requirements. It is also known by the Latin phrases ''honoris causa'' ("for the sake of the honour") or ''ad hon ...

University of Zurich The University of Zürich (UZH, german: Universität Zürich) is a public research university located in the city of Zürich, Switzerland. It is the largest university in Switzerland, with its 28,000 enrolled students. It was founded in 1833 f ...

, 2013 * CME Group-MSRI Prize in Innovative Quantitative Applications, 2016 *

Wilbur Cross Medal The Wilbur Cross Medal, or Wilbur Lucius Cross Medal for Alumni Achievement, is an award by the Yale University Graduate School Alumni Association to recognize "...distinguished achievements in scholarship, teaching, academic administration, and p ...

, 2017 * Onassis Prize in Finance, 2018 *

, 2022

Publications

Articles

“Fear of fire sales, illiquidity seeking, and credit freezes,”
co-author

Raghuram Rajan Raghuram Govind Rajan (born 3 February 1963) is an Indian economist and the Katherine Dusak Miller Distinguished Service Professor of Finance at the University of Chicago Booth School of Business. Quote: "I am an Indian citizen. I have always b ...

The Quarterly Journal of Economics ''The Quarterly Journal of Economics'' is a peer-reviewed academic journal published by the Oxford University Press for the Harvard University Department of Economics. Its current editors-in-chief are Robert J. Barro, Lawrence F. Katz, Nathan N ...

(May 2011).
"Liquidity Risk, Liquidity Creation and Financial Fragility: A Theory of Banking,"
co-author Raghuram Rajan,

Journal of Political Economy The ''Journal of Political Economy'' is a monthly peer-reviewed academic journal published by the University of Chicago Press. Established by James Laurence Laughlin in 1892, it covers both theoretical and empirical economics. In the past, the ...

(April 2001).
"Monitoring and Reputation: The Choice Between Bank Loans and Directly Placed Debt,"
Journal of Political Economy (August 1991).
"Financial Intermediation and Delegated Monitoring,"
Review of Economic Studies (July 1984).
"Bank Runs, Deposit Insurance, and Liquidity,"
co-author Philip Dybvig, Journal of Political Economy (June 1983).

References

External links

Professor Diamond's webpage at the University of Chicago Booth School of Business
* {{DEFAULTSORT:Diamond, Douglas Living people 1953 births Brown University alumni Yale Graduate School of Arts and Sciences alumni University of Chicago faculty Fellows of the Econometric Society Fellows of the American Academy of Arts and Sciences Members of the United States National Academy of Sciences Macroeconomists 21st-century American economists 20th-century American economists Presidents of the American Finance Association Nobel laureates in Economics American Nobel laureates