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Douglas Diamond Nobel Prize

From 4 to 5…

On October 10th 2022, Douglas W. Diamond, who joined Dimensional’s funds boards in 2017, was awarded the 2022 Nobel Prize in Economic Sciences; he received the award for his research on banks and financial crises.

Professor Diamond is considered a founder of modern banking theory, and his work has helped shape how government officials and others approach finance, especially at times of market stress.

As we already know, Dimensional have a long history of applying academic research to practical investing. On this news they recently stated:

We are honoured to get to work closely with Professor Diamond, appreciate his commitment to helping us innovate and provide good investment solutions for clients, and congratulate him on this well-deserved recognition of his contributions to research and economic sciences,”

Dimensional Founder and Executive Chairman David Booth.

The honour further strengthens Dimensional’s tradition of strong ties to esteemed scholars who help the firm’s work building research-driven investment solutions. Professor Diamond is the fifth academic with deep connections to Dimensional to receive the Nobel Prize. Three founding members of the board of directors of the company or the company’s funds—Eugene Fama, Merton Miller, and Myron Scholes—previously received the award. Robert Merton, currently the firm’s Resident Scientist, is also a Nobel laureate. See below for further details:

 

Eugene Fama – in 2013, he shared the Nobel Memorial Prize in Economic Sciences jointly with Robert J. Shiller and Lars Peter Hansen. He is regarded as “the father of modern finance”, as his works built the foundation of financial economics and have continue to be cited widely.

Merton Miller – in 1990 he shared the Nobel Memorial Prize in Economic Sciences, along with Harry Markowitz and William F. Sharpe. His works formed the basis of the “Modigliani-Miller Financial Theory”.

Myron Scholes – in 1997 he shared the Nobel Prize in Economics with Robert C. Merton “for a new method to determine the value of derivatives”.

Robert Merton – in 1997, he was awarded the Nobel Memorial Prize in Economic Sciences with Myron Scholes. He is Resident Scientist at Dimensional Fund Advisors, where he developed a next-generation integrated pension-management solution system that addresses deficiencies associated with traditional defined-benefit and defined-contribution plans.