Douglas Diamond

{{Infobox academic

| name = Douglas Diamond

| image = Douglas Diamond.jpg

| caption = Diamond at the White House in 2022

| birth_date = {{birth date and age|1953|10|25}}

| birth_place = Chicago, Illinois, U.S.

| awards = Nobel Memorial Prize in Economic Sciences (2022)

| education = Brown University (BA)
Yale University (MA, MPhil, PhD)

| workplaces = University of Chicago

| doctoral_advisor = Stephen A. Ross

| known_for = Diamond–Dybvig model

| thesis_title = Essays on Information and Financial Intermediation

| thesis_url = https://www.proquest.com/openview/571359c812bb61b328ea9e19d5f6c338/1

| thesis_year = 1980

| discipline = Economics

| children = Rebecca Diamond

}}

Douglas Warren Diamond (born October 25, 1953){{Cite web |title=Douglas Diamond's Curriculum Vitae |url=http://www.fin.ntu.edu.tw/~conference/conference2010/keynotespeaker/Diamond_CV.pdf |access-date=2022-10-10}}{{Cite web |title=The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2022 |url=https://www.nobelprize.org/prizes/economic-sciences/2022/diamond/facts/ |access-date=2022-12-09 |website=NobelPrize.org |language=en-US}} is an American economist. He is the Merton H. Miller Distinguished Service Professor of Finance at the University of Chicago Booth School of Business, where he has taught since 1979. Diamond specializes in the study of financial intermediaries, financial crises, and liquidity. He is a former president of the American Finance Association (2003) and the Western Finance Association (2001–02).

In October 2022, Diamond was awarded the Nobel Memorial Prize in Economic Sciences jointly with Ben Bernanke and Philip H. Dybvig. The prize was awarded in recognition of the economists' "research on banks and financial crises"{{cite web |last1=Horowitz |first1=Julia |title=Nobel Prize in economics awarded to trio including Ben Bernanke for work on financial crises |url=https://edition.cnn.com/2022/10/10/economy/nobel-prize-economics-winner-2022/index.html |website=CNN |access-date=10 October 2022 |language=en |date=10 October 2022}}{{Cite web |title=The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2022 |url=https://www.nobelprize.org/prizes/economic-sciences/2022/diamond/facts/ |access-date=2022-10-13 |website=NobelPrize.org |language=en-US}}

Diamond is best known for his work on financial crises and bank runs, particularly the influential Diamond–Dybvig model published in 1983 and the Diamond model of delegated monitoring published in 1984. In 2016, he was awarded the CME Group-MSRI Prize in Innovative Quantitative Applications.[http://cmegroup.mediaroom.com/2016-01-26-Douglas-Diamond-to-receive-CME-Group-MSRI-Prize-in-Innovative-Quantitative-Applications Douglas Diamond to receive CME Group-MSRI Prize in Innovative Quantitative Applications Retrieved on March 24, 2016.]

Early life and education

Douglas Warren Diamond was born on October 25, 1953. He was raised in the Hyde Park neighborhood of Chicago by a single mother.{{Cite web |date=2022-12-07 |title=How Prof. Douglas Diamond transformed the way we think about banking {{!}} University of Chicago News |url=https://news.uchicago.edu/story/how-prof-douglas-diamond-transformed-way-we-think-about-banking |access-date=2022-12-08 |archive-url=https://web.archive.org/web/20221207045258/https://news.uchicago.edu/story/how-prof-douglas-diamond-transformed-way-we-think-about-banking |archive-date=2022-12-07 }}{{Cite web |title=Douglas W. Diamond |url=https://www.chicagobooth.edu/faculty/nobel-laureates/douglas-w-diamond |access-date=2022-12-09 |website=The University of Chicago Booth School of Business |language=en}}

As an adolescent, Diamond originally intended to study molecular biology. Diamond matriculated at Brown University, where he decided to study economics instead, after taking a course on Milton Friedman and Anna Schwartz's A Monetary History of the United States. He graduated Phi Beta Kappa from Brown with a Bachelor of Arts degree in economics in 1975.{{cite web |url=https://www.chicagobooth.edu/faculty/directory/d/douglas-w-diamond#publications|title=Douglas W Diamond}} The following year, and in 1977 Diamond earned master's degrees, and ultimately a PhD in economics in 1980 from Yale University. At Yale, both Diamond and future Nobel co-recipient Philip H. Dybvig were advised by Stephen A. Ross. According to Diamond, the two would regularly converse outside Ross' office while waiting for appointments with him.{{Cite web |last=Cummings |first=Mike |date=2022-10-10 |title=For Nobel laureates, successful collaboration began as Yale grad students |url=https://news.yale.edu/2022/10/10/nobel-laureates-successful-collaboration-began-yale-grad-students |access-date=2022-10-10 |website=YaleNews |language=en}}{{Cite web |title=The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2022 |url=https://www.nobelprize.org/prizes/economic-sciences/2022/diamond/interview/ |access-date=2022-10-13 |website=NobelPrize.org |language=en-US}}

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 under the title "Financial Intermediation and Delegated Monitoring"{{cite thesis |last1=Diamond |first1=Douglas Warren |date=1980 |title=Essays on Information and Financial Intermediation |id={{NAID|BB03350655}} |oclc=9473153 |url=https://www.proquest.com/openview/571359c812bb61b328ea9e19d5f6c338/1 }}{{page needed|date=September 2023}}{{primary source inline|date=September 2023}}{{cite journal |last1=Diamond |first1=Douglas W. |title=Financial Intermediation and Delegated Monitoring |journal=The Review of Economic Studies |date=1984 |volume=51 |issue=3 |pages=393–414 |doi=10.2307/2297430 |jstor=2297430 }}{{primary source inline|date=September 2023}} This publication coined the term "delegated monitoring" and described Diamond's formal model of delegated monitoring.{{cite book |doi=10.1007/978-981-16-3472-7_3 |chapter=Theoretical Discussion on Banking Business Model and Banking Regulations |title=Implementation of Basel Accords in Bangladesh |date=2021 |last1=Hasan |first1=A K M Kamrul |last2=Suzuki |first2=Yasushi |pages=35–71 |isbn=978-981-16-3471-0 |s2cid=241704137 }} 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."{{Cite web |last=The Committee for the Prize in Economic Sciences in Memory of Alfred Nobel |title=Scientific Background on the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2022 |url=https://www.nobelprize.org/uploads/2022/10/advanced-economicsciencesprize2022.pdf |page=28}} 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 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 (1983) and the Bank of Japan (1999), as visiting professor at the Hong Kong University of Science and Technology and MIT Sloan School of Management, and as a professor and teaching fellow at the Yale School of Management.

= 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 as one of the "researchers likely to be in contention for Nobel honors based on the citation impact of their published research."[https://www.economist.com/blogs/freeexchange/2011/10/nobel-race Runners and riders. Retrieved on March 24, 2016.] He was again named as a contender for the prize in 2013 by economist Hubert Fromlet,{{Cite news |last=Magnusson |first=Niklas |date=October 3, 2013 |title=Deaton, Dixit, Tirole on Fromlet's Top Nobel Economy Prize List |work=Bloomberg News |url=https://www.bloomberg.com/news/articles/2013-10-03/deaton-dixit-tirole-on-fromlet-s-top-nobel-economy-prize-list}} The Wall Street Journal,{{Cite news |last=Cronin |first=Brenda |date=2013-10-10 |title=Handicapping the 2013 Economics Nobel |language=en-US |work=Wall Street Journal |url=https://www.wsj.com/articles/BL-REB-20888 |access-date=2022-10-13 |issn=0099-9660}} and Catherine Rampell, writing for The New York Times.{{Cite web |last=Rampell |first=Catherine |date=2013-10-11 |title=Economists to Watch for the Nobel Prize |url=https://archive.nytimes.com/economix.blogs.nytimes.com/2013/10/11/economists-to-watch-for-the-nobel-prize/ |access-date=2022-10-13 |website=Economix Blog |language=en}}

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, 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.{{Cite news |last=Granville |first=Kevin |date=2022-10-10 |title=Douglas Diamond and Philip Dybvig Created an Influential Model About Bank Runs |language=en-US |work=The New York Times |url=https://www.nytimes.com/2022/10/10/business/diamond-dybvig-model-nobel-economics.html |access-date=2022-10-13 |issn=0362-4331}}

Personal life

Diamond has been married to Elizabeth Cammack Diamond since 1982.{{Cite web |title=Douglas W. Diamond Wins Nobel Prize in Economic Sciences |url=https://www.chicagobooth.edu/why-booth/stories/douglas-w-diamond-wins-sveriges-riksbank-prize-in-economic-sciences |access-date=2022-10-13 |website=The University of Chicago Booth School of Business |language=en}} The couple has two children,{{Cite web |title=Douglas Diamond wins Nobel Prize for research on banks and financial crises {{!}} University of Chicago News |url=https://news.uchicago.edu/story/douglas-diamond-2022-nobel-prize-economics |access-date=2022-10-13 |website=news.uchicago.edu |date=10 October 2022 |language=en}} including economist Rebecca Diamond.{{Cite journal |last=List |first=John A |date=July 2020 |title=NON EST DISPUTANDUM DE GENERALIZABILITY? A GLIMPSE INTO THE EXTERNAL VALIDITY TRIAL |url=https://www.nber.org/system/files/working_papers/w27535/w27535.pdf |journal=NBER Working Paper Series |issue=27535 |pages=30}}

He is the son of Leon Diamond,{{Cite web |title=Leon Diamond Obituary {{!}} Chicago Tribune |url=https://www.legacy.com/us/obituaries/chicagotribune/name/leon-diamond-obituary?id=35549039 |access-date=2022-10-19 |website=news.uchicago.edu |language=en}}{{Cite web |title=Leon Diamond 1924-2022 |url=https://www.cremation-society.com/obituaries/Leon-Diamond-MD?obId=25292853 |access-date=2022-10-19 |website= |language=en}} a psychiatrist, and Margaret Gunkel Seehafer, a social worker and professor.{{Cite web |title=Seehafer, Margaret Irene Gunkel "Woodie" |url=https://madison.com/news/local/obituaries/seehafer-margaret-irene-gunkel-woodie/article_1f8b79ae-dac6-5380-bc54-975097be9bba.html |access-date=2022-10-20 |website=madison.com |date=30 March 2017 |language=en}}

Honors and awards

Fellow, Econometric Society (since 1990){{Cite web |title=Fellows {{!}} The Econometric Society |url=https://www.econometricsociety.org/society/organization-and-governance/fellows |access-date=2022-10-10 |website=www.econometricsociety.org}}
Member, American Academy of Arts and Sciences (elected 2001){{Cite web |title=Douglas W. Diamond |url=https://www.amacad.org/person/douglas-w-diamond |access-date=2022-10-10 |website=American Academy of Arts & Sciences |language=en}}
Fellow, American Finance Association (selected 2004){{Cite web |title=Fellows |url=https://afajof.org/fellows/ |access-date=2022-10-10 |website=The American Finance Association |language=en-US}}
Economic Theory Fellow, Society for the Advancement of Economic Theory (2016)
Member, National Academy of Sciences (elected 2017){{Cite web |title=Douglas W. Diamond |url=http://www.nasonline.org/member-directory/members/20041805.html |access-date=2022-10-10 |website=www.nasonline.org}}

= Awards =

Morgan Stanley-American Finance Association Award for Excellence in Finance, 2012{{Cite web |title=Douglas Diamond wins Morgan Stanley-AFA award for financial economics research |url=https://news.uchicago.edu/story/douglas-diamond-wins-morgan-stanley-afa-award-financial-economics-research |access-date=2022-10-11 |website=news.uchicago.edu |date=9 January 2012 |language=en}}
Doctor Honoris Causa, University of Zurich, 2013{{Cite web |title=Yale Graduate School honors four alumni with Wilbur Cross Medals {{!}} Yale Graduate School of Arts & Sciences |url=https://gsas.yale.edu/news/yale-graduate-school-honors-four-alumni-wilbur-cross-medals |access-date=2022-10-11 |website=gsas.yale.edu}}
CME Group-MSRI Prize in Innovative Quantitative Applications, 2016
Wilbur Cross Medal, 2017
Onassis Prize in Finance, 2018{{Cite web |title=Chicago Booth's Douglas Diamond wins Onassis Prize in Finance |url=https://news.uchicago.edu/story/chicago-booths-douglas-diamond-wins-onassis-prize-finance |access-date=2022-10-11 |website=news.uchicago.edu |date=25 April 2018 |language=en}}
Nobel Memorial Prize in Economic Sciences, 2022
Doctor of Humane Letters from Brown University, 2023.{{Cite web |title=Honorary Degrees |url=https://corporation.brown.edu/honorary-degrees |access-date=2024-05-09 |website=Corporation {{!}} Brown University |language=en}}

Publications

= Articles =

{{cite journal |last1=Diamond |first1=Douglas |last2=Rajan |first2=Raghuram |title=Fear of Fire Sales and the Credit Freeze |url=https://www.nber.org/papers/w14925 |journal=The Quarterly Journal of Economics |date=April 2009 |volume=126 |issue=2 |pages=557–591 |doi=10.3386/w14925}}
{{cite journal |last1=Diamond |first1=Douglas W. |last2=Rajan |first2=Raghuram G. |title=Liquidity Risk, Liquidity Creation, and Financial Fragility: A Theory of Banking |journal=Journal of Political Economy |date=April 2001 |volume=109 |issue=2 |pages=287–327 |doi=10.1086/319552 |s2cid=32078187 |url=http://papers.nber.org/papers/w7430.pdf}}
{{cite journal |last1=Diamond |first1=Douglas W. |title=Monitoring and Reputation: The Choice between Bank Loans and Directly Placed Debt |journal=Journal of Political Economy |date=August 1991 |volume=99 |issue=4 |pages=689–721 |doi=10.1086/261775 |s2cid=56293289 |url=http://knowledge.uchicago.edu/record/4959 }}
{{cite journal |last1=Diamond |first1=Douglas W. |title=Financial Intermediation and Delegated Monitoring |journal=The Review of Economic Studies |date=1984 |volume=51 |issue=3 |pages=393–414 |doi=10.2307/2297430 |jstor=2297430 }}
{{cite journal |last1=Diamond |first1=Douglas W. |last2=Dybvig |first2=Philip H. |title=Bank Runs, Deposit Insurance, and Liquidity |journal=Journal of Political Economy |date=June 1983 |volume=91 |issue=3 |pages=401–419 |doi=10.1086/261155 |s2cid=14214187 |url=http://minneapolisfed.org/research/qr/qr2412.pdf }}