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.[5] In 2016,he was awarded the CME Group-MSRI Prize in Innovative Quantitative Applications.[6]
Early life and education
Douglas Warren Diamond was born on October 25,1953.[2] He was raised in the Hyde Park neighborhood of Chicago by a single mother.[7][8]
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.[7][8] He graduated Phi Beta Kappa from Brown with a Bachelor of Arts degree in economics in 1975.[9] The following year,and in 1977 Diamond earned master's degrees,and ultimately a PhD in economics in 1980 from Yale University.[9] 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.[10][11]
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"[12][5] This publication coined the term "delegated monitoring" and described Diamond's formal model of delegated monitoring.[13] 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."[14] Since its publication,Diamond (1984) has become a key publication in scholarship concerning financial intermediation.[14]
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.[9] From 2010 to 2014,Diamond directed the Fama-Miller Center for Research in Finance at the University of Chicago.
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."[15] He was again named as a contender for the prize in 2013 by economist Hubert Fromlet,[16]The Wall Street Journal,[17] and Catherine Rampell,writing for The New York Times.[18]
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.[19]
Personal life
Diamond has been married to Elizabeth Cammack Diamond since 1982.[20] The couple has two children,[21] including economist Rebecca Diamond.[22]
He is the son of Leon Diamond,[23][24] a psychiatrist,and Margaret Gunkel Seehafer,a social worker and professor.[25]
Diamond, Douglas W. (1984). "Financial Intermediation and Delegated Monitoring". The Review of Economic Studies. 51 (3): 393–414. doi:10.2307/2297430. JSTOR2297430.
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