Janet Yellen

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Janet Yellen
Janet Yellen official portrait.jpg
15th Chair of the Federal Reserve
Incumbent
Assumed office
February 3, 2014
President Barack Obama
Deputy Stanley Fischer
Preceded by Ben Bernanke
Vice Chair of the Federal Reserve System
In office
October 4, 2010 – February 3, 2014
President Barack Obama
Preceded by Donald Kohn
Succeeded by Stanley Fischer
President of the Federal Reserve Bank of San Francisco
In office
June 14, 2004 – October 4, 2010
Preceded by Robert Parry
Succeeded by John Williams
Chairperson of the Council of Economic Advisers
In office
February 18, 1997 – August 3, 1999
President Bill Clinton
Preceded by Joseph Stiglitz
Succeeded by Martin Baily
Personal details
Born Janet Louise Yellen
(1946-08-13) August 13, 1946 (age 68)
Brooklyn, New York, U.S.
Political party Democratic
Spouse(s) George Akerlof
Alma mater Brown University
Yale University

Janet Louise Yellen (born August 13, 1946) is an American economist. She is the Chair of the Board of Governors of the Federal Reserve System, previously serving as Vice Chair from 2010 to 2014.

Previously, she was President and Chief Executive Officer of the Federal Reserve Bank of San Francisco; Chair of the White House Council of Economic Advisers under President Bill Clinton; and Professor Emerita at the University of California, Berkeley, Haas School of Business. On January 6, 2014, the United States Senate confirmed Yellen's nomination to be Chair of the Federal Reserve Board of Governors.[1] Yellen was sworn in on February 3, 2014, making her the first woman to hold the position.[2]

Early life and education[edit]

Yellen was born to a Jewish family in Brooklyn, New York, the daughter of Anna (née Blumenthal) and Julius Yellen, a physician.[3][4] She graduated from Fort Hamilton High School in the Bay Ridge section of Brooklyn.[5] She graduated summa cum laude from Pembroke College (Brown University) with a degree in economics in 1967, and received her Ph.D. in economics from Yale University in 1971 for a thesis titled Employment, output and capital accumulation in an open economy: a disequilibrium approach under the supervision of James Tobin and Joseph Stiglitz.[6]

Yellen is married to George Akerlof, a Nobel prize-winning economist and professor emeritus at the University of California, Berkeley.[7] Their son, Robert Akerlof, teaches Economics at the University of Warwick.[8]

Career[edit]

Yellen was an assistant professor at Harvard in 1971–76 and a lecturer at The London School of Economics and Political Science in 1978-1980. She was an economist with the Federal Reserve Board of Governors in 1977–78.[9] Beginning in 1980, Yellen has been conducting research at the Haas School and teaching macroeconomics to full-time and part-time MBA and undergraduate students. She is now a Professor Emerita at the University of California, Berkeley's Haas School of Business, where she was named Eugene E. and Catherine M. Trefethen Professor of Business and Professor of Economics. Twice she has been awarded the Haas School's outstanding teaching award.

Yellen served as Chair of President Bill Clinton's Council of Economic Advisers from February 18, 1997,[10] to August 3, 1999, and was appointed as a member of the Federal Reserve System's Board of Governors from 1994 to 1997. Yellen serves as president of the Western Economic Association International and is a former vice president of the American Economic Association. She was a fellow of the Yale Corporation.

From June 14, 2004, until 2010, Yellen was the President and Chief Executive Officer of the Federal Reserve Bank of San Francisco. She was a voting member of the Federal Open Market Committee (FOMC) in 2009. Following her appointment to the Federal Reserve in 2004, she spoke publicly, and in meetings of the Fed’s monetary policy committee, about her concern about the potential consequences of the boom in housing prices. However, Yellen did not lead the San Francisco Fed to "move to check [the] increasingly indiscriminate lending" of Countrywide Financial, the largest lender in the U.S.[11]

In a 2005 speech in San Francisco, Yellen argued against deflating the housing bubble because "arguments against trying to deflate a bubble outweigh those in favor of it" and predicted that the housing bubble "could be large enough to feel like a good-sized bump in the road, but the economy would likely be able to absorb the shock."[12] In 2010, Yellen told the Financial Crisis Inquiry Commission that she and other San Francisco Fed officials looked for guidance from Washington because "she had not explored the San Francisco Fed’s ability to act unilaterally," according to the New York Times.[11] Yellen conceded her previous misjudgment of the housing crisis to the Commission: "I guess I thought that similar to the collapse of the stock market around the tech bubble, that most likely the economy could withstand [the housing collapse] and the Fed could move to support the economy the way it had after the tech bubble collapsed."[13]

In July 2009, Yellen was mentioned as a potential successor to Ben Bernanke as chair of the Federal Reserve System, before he was renominated by Barack Obama.[14][15]

Vice-chair[edit]

Yellen sworn in by Fed Chairman Ben Bernanke in October 2010

On April 28, 2010, President Obama nominated Yellen to succeed Donald Kohn as vice-chair of the Federal Reserve System.[16] In July, the Senate Banking Committee voted 17 to 6 to confirm her, though the top Republican on the panel, Senator Richard C. Shelby of Alabama, voted no, saying he believed Yellen had an "inflationary bias". At the same time, on the heels of related testimony by Fed Chairman Bernanke, FOMC voting member James B. Bullard of the St. Louis Fed made a statement that the U.S. economy was "at risk of becoming 'enmeshed in a Japanese-style deflationary outcome within the next several years'".

Bullard's statement was interpreted as a possible shift within the FOMC balance between inflation hawks and doves. Yellen's pending confirmation, along with those of Peter A. Diamond and Sarah Bloom Raskin to fill vacancies, was seen as possibly furthering such a shift in the FOMC. All three nominations were seen as "on track to be confirmed by the Senate".[17]

On October 4, 2010, Yellen was sworn in for a 4-year term ending October 4, 2014. Yellen simultaneously began a 14-year term as a member of the Federal Reserve Board that will expire on January 31, 2024.[18]

Chair of the Federal Reserve[edit]

On October 9, 2013, Yellen was officially nominated to replace Bernanke as head of the Federal Reserve. During the nomination hearings held on November 14, 2013, Yellen defended the more than $3 trillion in stimulus funds that the Fed has been injecting into the U.S. economy, which continue to grow at a rate of $85 billion a month.[19] Additionally, Yellen testified that U.S. monetary policy is to revert towards more traditional monetary policy once the economy is back to normal.[20][21]

On December 20, 2013, the U.S. Senate voted 59–34 for cloture on Yellen's nomination.[22] On January 6, 2014, she was confirmed as Chair of the Federal Reserve by a vote of 56–26, the narrowest margin ever for the position.[23] In addition to being the first woman to hold the position, Yellen is also the first Democratic nominee to run the Fed since Paul Volcker became chairman in 1979.[24] After being elected by the Federal Open Market Committee as its chair on 30 January 2014, she took office on February 3.[25][26]

Philosophy[edit]

Yellen is considered by many on Wall Street to be a "dove" (more concerned with unemployment than with inflation) and as such to be less likely to advocate Federal Reserve interest rate hikes, as compared, for example, to William Poole (former St. Louis Fed president) a "hawk".[27] However, some predict Yellen could act more as a hawk if economic circumstances dictate.[28]

Yellen is a Keynesian economist and believes in the modern version of the Phillips curve, which, in its original, pre-1970s form, stated a simple inverse relationship between unemployment and inflation. In her 2010 nomination hearing for Vice Chair of the Federal Reserve Board of Governors, Yellen said, "The modern version of the Phillips curve model—relating movements in inflation to the degree of slack in the economy—has solid theoretical and empirical support."[29]

In a 1995 meeting of the Federal Open Market Committee while serving on the Board of Governors of the Federal Reserve System, Yellen stated that occasionally letting inflation rise could be a "wise and humane policy" if it increases output. At the same meeting she also claimed that each percentage point reduction in inflation results in a 4.4 percent loss of Gross Domestic Product.[30]

Honors and awards[edit]

Yellen received the Wilbur Cross Medal from Yale in 1997, an honorary Doctor of Laws degree from Brown in 1998, and an honorary Doctor of Humane Letters from Bard College in 2000. In October 2013, it was announced that she will receive an Honorary Doctorate from the London School of Economics in July 2014, making her and her husband "the first wife and husband team to hold honorary doctorates from the School".[31]

In October 2010, she received the Adam Smith Award from the National Association for Business Economics (NABE).[32]

In 2012, she was elected Distinguished Fellow of the American Economic Association.

In September 2012, she was included in the 50 Most Influential list of Bloomberg Markets magazine.

In 2014, she was elected by Forbes as the second most powerful woman in the world. She is the highest ranking American on the list.[33]

Positions held[edit]

  • 2014–present Chair, Board of Governors, Federal Reserve System
  • 2010–2013 Vice Chair, Board of Governors, Federal Reserve System
  • 2004–2010 President and CEO, Federal Reserve Bank of San Francisco
  • 1997–1999 Chair, President's Council of Economic Advisers
  • 1994–1997 Member, Board of Governors of the Federal Reserve System
  • 1985–present Professor, Haas School of Business, UC Berkeley
  • 1980–1985 Associate Professor, Haas School of Business, UC Berkeley
  • 1978–1980 Lecturer, London School of Economics and Political Science
  • 1977–1978 Economist, Division of International Finance, Trade and Financial Studies Section, Board of Governors of the Federal Reserve System
  • 1971–1976 Assistant Professor, Department of Economics, Harvard University
  • 1974 Research Fellow, Massachusetts Institute of Technology

External service and assignments[edit]

  • President and CEO, Federal Reserve Bank of San Francisco
  • Fellow, American Academy of Arts and Sciences, 2001
  • Vice President, Western Economics Association, 2001
  • Fellow, Yale Corporation 2000–
  • Member, National Academy of Sciences Panel on Ensuring the Best Presidential Science and Technology Appointments, 2000
  • Research Associate, National Bureau of Economic Research, 1999–
  • Advisory Board, Center for International Political Economy, 1999–
  • Advisory Board, Brookings Panel on Economic Activity, 1999
  • Chair: Economic Policy Committee of the Organization for Economic Cooperation and Development 1997–1999
  • President's Interagency Committee on Women's Business Enterprise (1997)
  • Member and adviser: Brookings Panel on Economic Activity (senior advisor); Advisor Panel in Economics, National Science Foundation;
  • Adviser: Congressional Budget Office
  • Research fellow: Yale University, and Massachusetts Institute of Technology
  • Trustee of the Economists for Peace and Security

Selected works[edit]

Books
  • The Fabulous Decade: Macroeconomic Lessons from the 1990s (with Alan Blinder), The Century Foundation Press, New York, 2001. ISBN 0-87078-467-6
Articles
  • "East Germany In From the Cold: The Economic Aftermath of Currency Union" (with George Akerlof, Andrew Rose, and Helga Hessenius), Brookings Papers on Economic Activity 1991:1.
  • "How Large are the Losses from Rule of Thumb Behavior in Models of the Business Cycle?" (with George Akerlof) in Willima Brainard, William Nordhaus, and Harold Watts, eds., Money, Macroeconomics and Economic Policy: Essays in Honor of James Tobin, Cambridge, Mass.: MIT Press (1991). ISBN 0-262-02325-3
  • "An Analysis of Out-of-Wedlock Childbearing in the United States," (with George Akerlof and Michael Katz). Quarterly Journal of Economics (May 1996); adapted into a Policy Brief prepared for the Fall 1996 issue of the Brookings Review doi:10.2307/2946680
  • "Monetary Policy: Goals and Strategy," Business Economics (July 1996).
  • "Trends in Income Inequality and Policy Responses," Looking Ahead, October 1997; reproduced in James Auerbach and Richard Belous, eds., The Inequality Paradox: Growth of Income Disparity, National Policy Association, 1998
  • "The Continuing Importance of Trade Liberalization," Business Economics (1998).
  • Rose, Andrew K. & Yellen, Janet L., 1989. "Is there a J-curve?," Journal of Monetary Economics, Elsevier, vol. 24(1), pages 53–68, July.
  • Yellen, Janet L, 1984. "Efficiency Wage Models of Unemployment," American Economic Review, American Economic Association, vol. 74(2), pages 200-205
  • McCulloch, Rachel & Yellen, Janet, 1982. "Can capital movements eliminate the need for technology transfer?," Journal of International Economics, Elsevier, vol. 12(1-2), pages 95–106, February.

References[edit]

  1. ^ Lowrey, Annie (January 6, 2014). "Senate Confirms Yellen as Fed Chairwoman". New York Times. Retrieved January 6, 2014. 
  2. ^ Yellen Takes Over Federal Reserve As Bernanke Departs
  3. ^ "Obama to nominate Jewish economist Janet Yellen as new Fed chief". World Jewish Congress. 9 October 2013. Retrieved 8 January 2014. 
  4. ^ The Jewish Daily Forward: "Janet Yellen's Faith Slips Under the Radar As Gender Takes Over -New Fed Chief Is First Women to Hold the Position" October 15, 2013
  5. ^ "Fort Hamilton HS class of 1962". Forthamiltonhighschool.net. Retrieved April 6, 2011. 
  6. ^ "Employment, output and capital accumulation in an open economy: a disequilibrium approach". ProQuest. Retrieved 8 January 2014. 
  7. ^ "U.C. Berkeley professor turns 'lemons' into Nobel Prize | j. the Jewish news weekly of Northern California". Jweekly.com. October 12, 2001. Retrieved October 9, 2013. 
  8. ^ "Faculty Directory – University of Warwick, Department of Economics". University of Warwick. Retrieved March 13, 2012. 
  9. ^ Binyamin Appelbaum (April 24, 2013). "Possible Fed Successor Has Admirers and Foes". New York Times. 
  10. ^ "Dr. Janet L. Yellen, Chair, Council of Economic Advisers". Clinton4.nara.gov. Retrieved October 9, 2013. 
  11. ^ a b Appelbaum, Binyamin (August 13, 2013). "Divining the Regulatory Goals of Fed Rivals". The New York Times. 
  12. ^ Janet Yellen (October 21, 2005). "Presentation to the Fourth Annual Haas Gala". Federal Reserve Bank of San Francisco. Retrieved October 17, 2013. 
  13. ^ "FCIC Staff Audiotape of Interview with Janet Yellen, Federal Reserve Board". Financial Crisis Inquiry Commission. November 15, 2010. Retrieved October 17, 2013. 
  14. ^ Hilsenrath, Jon; Reddy, Sudeep; Wessel, David (July 9, 2009). "White House Ponders Bernanke's Future". The Wall Street Journal. 
  15. ^ Lee, Carol E. (September 16, 2013). "Yellen Is Now Top Fed Hopeful". The Wall Street Journal. Retrieved October 9, 2013. 
  16. ^ Reddy, Sudeep (April 29, 2010). "Obama Nominates Yellen, Raskin, Diamond to Fed Board". The Wall Street Journal. 
  17. ^ Fed Member’s "Deflation Warning Hints at Policy Shift" by Sewell Chan, The New York Times, July 29, 2010. Retrieved July 29, 2010.
  18. ^ Janet L. Yellen's Biography page at the Federal Reserve System website
  19. ^ CNN: "Smooth sailing for Yellen in front of Senate" By Annalyn Kurtz November 14, 2013
  20. ^ Opellius: "2014 Dollar, Currency & Gold Outlook" By Axel Merk
  21. ^ Nomination of Janet L. Yellen: Hearing Before the Committee on Banking, Housing, and Urban Affairs, United States Senate, One Hundred Thirteenth Congress, First Session, on Nomination of Janet L. Yellen, of California, to be Chairman of the Board of Governors of the Federal Reserve System, November 14, 2013
  22. ^ "Vote Summary - Question: On the Cloture Motion (Motion to Invoke Cloture on the Nomination of Janet L. Yellen to be Chair of the Board of Governors of the Federal Reserve System )". U.S. Senate Roll Call Votes 113th Congress - 1st Session. Retrieved 2014-01-08. 
  23. ^ Lowrey, Annie (2014-01-06). "Yellen Wins Backing of Senators to Lead Fed". New York Times. Retrieved 2014-01-08. 
  24. ^ Solomon, Brian (January 6, 2014). "Janet Yellen Confirmed as Fed Chair". Legal Times. 
  25. ^ "Janet L. Yellen sworn in as chair of the Board of Governors of the Federal Reserve System". Federal Reserve Board. Retrieved 3 February 2014. 
  26. ^ http://bloomberg.econoday.com/byshoweventfull.asp?fid=463575&cust=bloomberg-us&year=2014&lid=0&prev=/byweek.asp#top
  27. ^ Bull, Alister (March 12, 2010). "FACTBOX-Yellen, Raskin and Diamond eyed for Fed board". Reuters. 
  28. ^ Mark P. Cussen (October 16, 2013). "Janet Yellen: Background And Philosophy". San Francisco Chronicle. Archived from the original on November 13, 2013. Retrieved June 11, 2014. 
  29. ^ "Senate Committee Hearing on the Nomination of Janet Yellen, Peter Diamond, Sarah Bloom Raskin, Osvaldo Luis Gratacos Munet, and Steve Linick". United States Government Printing Office. July 15, 2010. Retrieved October 14, 2013. 
  30. ^ "Meeting of the Federal Open Market Committee". United States Federal Reserve System. January 31 – February 1, 1995. Retrieved October 17, 2013. 
  31. ^ "From LSE to the Chair of the Federal Reserve". London School of Economics. Retrieved October 16, 2013.
  32. ^ Beckner, Steven "Yellen Pleased w/Resolution Regime; Must Monitor Regultn Impact" Market News International, October 11, 2010. Retrieved October 11, 2010.
  33. ^ Howard, Caroline. "The World's Most Powerful Women 2014". Forbes. Forbes. Retrieved 17 June 2014. 

External links[edit]

Political offices
Preceded by
Joseph Stiglitz
Chairperson of the Council of Economic Advisers
1997–1999
Succeeded by
Martin Baily
Civic offices
Preceded by
Robert Parry
President of the Federal Reserve Bank of San Francisco
2004–2010
Succeeded by
John Williams
Preceded by
Donald Kohn
Vice Chair of the Federal Reserve System
2010–2014
Succeeded by
Stanley Fischer
Designate
Preceded by
Ben Bernanke
Chair of the Federal Reserve
2014–present
Incumbent
United States order of precedence (ceremonial)
Preceded by
Partick Donahoe
as Postmaster General
Order of Precedence of the United States
Chair of the Federal Reserve
Succeeded by
Michael Boots
as Chair of the Council on Environmental Quality