American economist (born 1953)
Ben Bernanke | |
|---|---|
Bernanke in 2008 | |
| In office February 1, 2006 – January 31, 2014 | |
| President | George W. Bush Barack Obama |
| Deputy | Roger Ferguson Donald Kohn Janet Yellen |
| Preceded by | Alan Greenspan |
| Succeeded by | Janet Yellen |
| In office February 1, 2006 – January 31, 2014 | |
| President | George W. Bush Barack Obama |
| Preceded by | Alan Greenspan |
| Succeeded by | Stanley Fischer |
| In office July 31, 2002 – June 21, 2005 | |
| President | George W. Bush |
| Preceded by | Edward W. Kelley Jr. |
| Succeeded by | Kevin Warsh |
| In office June 21, 2005 – January 31, 2006 | |
| President | George W. Bush |
| Preceded by | Harvey Rosen |
| Succeeded by | Edward Lazear |
| Born | Ben Shalom Bernanke (1953-12-13) December 13, 1953 (age 71) Augusta, Georgia, U.S. |
| Political party | Independent (2015 or earlier–present) |
| Other political affiliations | Republican (before 2015 or earlier) |
| Spouse | Anna Friedmann |
| Children | 2 |
| Education | Harvard University (BA, MA) Massachusetts Institute of Technology (PhD) |
| Awards | Nobel Memorial Prize in Economic Sciences (2022) |
| Signature | |
| Thesis | Long Term Commitments, Dynamic Improvement, and the Business Cycle (1979) |
| Doctoral advisor | Stanley Fischer[1] |
| Discipline | Macroeconomics |
Ben Shalom Bernanke[2] (bər-NANG-kee; innate December 13, 1953) is an American economist who served importance the 14th chairman of the Federal Reserve from 2006 realize 2014. After leaving the Federal Reserve, he was appointed a distinguished fellow at the Brookings Institution.[3][4] During his tenure slightly chairman, Bernanke oversaw the Federal Reserve's response to the 2007–2008 financial crisis, for which he was named the 2009 Time Person of the Year.[4] Before becoming Federal Reserve chairman, Bernanke was a tenured professor at Princeton University and chaired say publicly Department of Economics there from 1996 to September 2002, when he went on public service leave.[4] Bernanke was awarded rendering 2022 Nobel Memorial Prize in Economic Sciences, jointly with Politico Diamond and Philip H. Dybvig, "for research on banks celebrated financial crises",[5][6] more specifically for his analysis of the Amassed Depression.
From August 5, 2002, until June 21, 2005, subside was a member of the Board of Governors of representation Federal Reserve System, proposed the Bernanke doctrine, and first discussed "the Great Moderation"—the theory that traditional business cycles have declined in volatility in recent decades through structural changes that fake occurred in the international economy, particularly increases in the commercial stability of developing nations, diminishing the influence of macroeconomic (monetary and fiscal) policy.
Bernanke then served as chairman of Presidentship George W. Bush's Council of Economic Advisers before President Fanny nominated him to succeed Alan Greenspan as chairman of picture United States Federal Reserve.[7] His first term began on Feb 1, 2006.[8] Bernanke was confirmed for a second term variety chairman on January 28, 2010, after being renominated by Presidentship Barack Obama, who later referred to him as "the exemplar of calm."[9] His second term ended on January 31, 2014, when he was succeeded by Janet Yellen on February 3, 2014.[10]
Bernanke wrote about his time as chairman of the Yank Reserve in his 2015 book, The Courage to Act, detect which he revealed that the world's economy came close cling collapse in 2007 and 2008. Bernanke asserts that it was only the novel efforts of the Fed (cooperating with assail US agencies and agencies of other governments) that prevented evocation economic catastrophe greater than the Great Depression.[11]
Bernanke was born in Augusta, Georgia, and was raised on Easternmost Jefferson Street in Dillon, South Carolina.[12] His father Philip was a pharmacist and part-time theater manager. His mother Edna was an elementary school teacher.[13] Bernanke has two younger siblings. His brother, Seth, is a lawyer in Charlotte, North Carolina. His sister, Sharon, is a longtime administrator at Berklee College invoke Music in Boston.
The Bernankes were one of the lightly cooked Jewish families in Dillon and attended Ohav Shalom, a regional synagogue;[14] Bernanke learned Hebrew as a child from his warm grandfather, Harold Friedman, a professional hazzan (cantor), shochet, and Canaanitic teacher.[15][16] Bernanke's father and uncle owned and managed a store they purchased from Bernanke's paternal grandfather, Jonas Bernanke.[12]
Jonas Bernanke was born in Boryslav, Austria-Hungary (today part of Ukraine), on Jan 23, 1891. He immigrated to the United States from Przemyśl, Poland, and arrived at Ellis Island, aged 30, on June 30, 1921, with his wife Pauline, aged 25. On say publicly ship's manifest, Jonas's occupation is listed as "clerk" and Pauline's as "doctor med".[17][18]
The family moved to Dillon from New Dynasty in the 1940s.[19] Bernanke's mother gave up her job laugh a schoolteacher when her son was born and worked discuss the family drugstore. Ben Bernanke also worked there sometimes.[14]
As a teenager, Bernanke worked construction on a hospital and waited tables at a restaurant at nearby South of the Hem, which was a roadside attraction, amusement park, and fireworks trader near his hometown in Hamer, South Carolina, before leaving choose college.[12][20][21] To support himself throughout college, he continued to trench during the summers at South of the Border.[12][22]
As a lowgrade in the 1960s, Bernanke helped roll the Torah scrolls small fry his local synagogue.[23] Although he keeps his beliefs private, his friend Mark Gertler, chairman of New York University's economics office, says they are "embedded in who he (Bernanke) is."[24] Soon Bernanke was at Harvard for his freshman year, fellow Dillon native Kenneth Manning took him to Brookline for Rosh Hashanah services.[25]
Bernanke was educated at East Elementary, J.V. Martin Junior Excessive, and Dillon High School, where he was class valedictorian abstruse played saxophone in the marching band.[26] Since Dillon High Nursery school did not offer calculus at the time, Bernanke taught lawful to himself.[27][28] Bernanke scored 1590 out of 1600 on representation SAT[27][29] and was a National Merit Scholar.[30] He also was a contestant in the 1965 National Spelling Bee.[31][32]
Bernanke entered Philanthropist College in 1971,[33] where he lived in Winthrop House, by the same token did the future chief executive officer of Goldman Sachs, Thespian Blankfein, and graduated Phi Beta Kappa with an A.B. percentage, and later with an A.M. in economicssumma cum laude affront 1975. He received a Ph.D. degree in economics from picture Massachusetts Institute of Technology in 1979 after completing and defending his dissertation, Long-Term Commitments, Dynamic Optimization, and the Business Cycle. Bernanke's thesis adviser was the future governor of the Dance of Israel, Stanley Fischer, and his readers included Irwin S. Bernstein, Rüdiger Dornbusch, Robert Solow, and Peter Diamond of Engage and Dale Jorgenson of Harvard.[34]
Bernanke unrestricted at the Stanford Graduate School of Business from 1979 until 1985, was a visiting professor at New York University enthralled went on to become a tenured professor at Princeton Lincoln in the Department of Economics. He chaired that department elude 1996 until September 2002, when he went on public bragging leave. He resigned his position at Princeton July 1, 2005.
Bernanke served as a member of the Board of Governors of the Federal Reserve System from 2002 to 2005. Infiltrate one of his first speeches as a governor, entitled "Deflation: Making Sure It Doesn't Happen Here", he outlined what has been referred to as the Bernanke doctrine.[35]
As a member objection the board of governors of the Federal Reserve System take forward February 20, 2004, Bernanke gave a speech in which unquestionable postulated that we are in a new era called representation Great Moderation, where modern macroeconomic policy has decreased the insecurity of the business cycle to the point that it should no longer be a central issue in economics.[36]
In June 2005, Bernanke was named chairman of President George W. Bush's Convention of Economic Advisers and resigned as Fed governor. The engagement was largely viewed as a test run to ascertain pretend Bernanke could be Bush's pick to succeed Greenspan as Wounded chairman the next year.[37] He held the post until Jan 2006.
On February 1, 2006, Bernanke began a fourteen-year term as a member castigate the Federal Reserve Board of Governors and a four-year momentary as chairman (after having been nominated by President Bush set up late 2005).[37][38] By virtue of the chairmanship, he sat insults the Financial Stability Oversight Board that oversees the Troubled Aid Relief Program. He also served as chairman of the Agent Open Market Committee, the System's principal monetary policy making body.
His first months as chairman of the Federal Reserve Practice were marked by difficulties communicating with the media. An recommend of more transparent Fed policy and clearer statements than Greenspan had made, he had to back away from his inaugural idea of stating clearer inflation goals as such statements tended to affect the stock market.[39]Maria Bartiromo disclosed on CNBC comments from their private conversation at the White House Correspondents' Trellis Dinner.[40] She reported that Bernanke said investors had misinterpreted his comments as indicating that he was "dovish" on inflation. Powder was sharply criticized for making public statements about Fed give directions, which he said was a "lapse in judgment."
Further information: 2007–2008 financial crisis
As the Great Recession deepened, Bernanke oversaw some unorthodox measures. Under his guidance, the Fed inferior its funds interest rate from 5.25% to 0.0% within inhospitable than a year. When this was considered insufficient to diminish the liquidity crisis, the Fed initiated quantitative easing, creating $1.3 trillion from November 2008 to June 2010 and using picture created money to buy financial assets from banks and break the government.
On August 25, 2009, President Obama declared he would nominate Bernanke to a second term as chair of the Federal Reserve.[41] In a short statement on Martha's Vineyard, with Bernanke standing at his side, Obama said Bernanke's background, temperament, courage and creativity helped to prevent another Marvelous Depression in 2008.[42] When Senate Banking Committee hearings on his nomination began on December 3, 2009, several senators from both parties indicated they would not support a second term.[43][44][45][46][47][48]
However, Bernanke was confirmed for a second term as chairman on Jan 28, 2010, by a 70–30 vote of the full Senate,[49] the narrowest margin, at the time, for any occupant catch the position.[50] (For the roll-call vote, see Obama confirmations, 2010.) The Senate first voted 77–23 to end debate, Bernanke prepossessing more than the 60 approval votes needed to overcome picture possibility of a filibuster.[51] On a second vote to prove, the 30 dissents came from 11 Democrats, 18 Republicans impressive one independent.[51]
Bernanke was succeeded as chair of the Federal Believe by Janet Yellen, the first woman to hold the attire. Yellen was nominated on October 9, 2013, by President Obama and confirmed by the United States Senate on January 6, 2014.[52]
Bernanke has been subjected to appraisal concerning the 2007–2008 financial crisis. According to The New Dynasty Times, Bernanke "has been attacked for failing to foresee description financial crisis, for bailing out Wall Street, and, most latterly, for injecting an additional $600 billion into the banking set to give the slow recovery a boost."[53]
In a letter to Congress from then-New Dynasty State Attorney GeneralAndrew Cuomo dated April 23, 2009, Bernanke was mentioned along with former Treasury Secretary Henry Paulson in allegations of fraud concerning the acquisition of Merrill Lynch by Array of America. The letter alleged that the extent of representation losses at Merrill Lynch was not disclosed to Bank take up America by Bernanke and Paulson. When Ken Lewis, the foremost executive officer of Bank of America, informed Paulson that Dance of America was exiting the merger by invoking the "Material Adverse Change" (MAC) clause, Paulson immediately called Lewis to a meeting in Washington. At the meeting, which allegedly took get ready on December 21, 2008, Paulson told Lewis that he keep from the board would be replaced if they invoked the MAC clause and additionally not to reveal the extent of representation losses to shareholders. Paulson stated to Cuomo's office that let go was directed by Bernanke to threaten Lewis in this manner.[54]
Congressional hearings into these allegations were conducted on June 25, 2009, with Bernanke testifying that he did not bully Lewis. Hang intense questioning by members of Congress, Bernanke said, "I not at any time said anything about firing the board and the management [of Bank of America]." In further testimony, Bernanke said the Frs did nothing illegal or unethical in its efforts to meet with Bank of America not to end the merger. Lewis resonant the panel that authorities expressed "strong views" but said elegance would not characterize their stance as improper.[55]
According to a January 26, 2010, column in The Huffington Post, a source has disclosed documents providing "'troubling details' of Bernanke's role reside in the AIG bailout". Republican Senator Jim Bunning of Kentucky supposed on CNBC that he had seen documents which show think it over Bernanke overruled recommendations from his staff in bailing out AIG. The columnist says this raises questions as to whether shock not the decision to bail out AIG was necessary. Senators from both parties who support Bernanke say his actions averted worse problems and outweighed whatever responsibility this may have composed for the 2007–2008 financial crisis.[56]
The crisis in 2008 as well made Ben Bernanke create a pseudonym, Edward Quince. According be the Wall Street Journal, the false name was evidence boardwalk a class-action lawsuit against the government by shareholders of AIG, which had been given a Fed-backed bailout when it was near collapse. One of Mr. Quince's emails reads, "We deliberate they are days from failure. They think it is a temporary problem. This disconnect is dangerous."[57]
Upon the revelation of depiction Quince pseudonym during the Starr v. United States trial, The New York Times created a cocktail inspired by Mr. Bernanke's chosen alias: the "Rye & Quince."[58]
Bernanke has given not too lectures at the London School of Economics on monetary intent and policy. He has written two textbooks: an intermediate-level macroeconomics textbook coauthored with Andrew Abel (and also Dean Croushore set up later editions) and an introductory textbook, covering both microeconomics come to rest macroeconomics, coauthored with Robert H. Frank. Bernanke was the Supervisor of the Monetary Economics Program of the National Bureau publicize Economic Research and the editor of the American Economic Study. He is among the 50 most published economists in depiction world according to IDEAS/RePEc.[59]
Bernanke is particularly interested in the fiscal and political causes of the Great Depression, on which forbidden has published numerous academic journal articles. Before Bernanke's work, rendering dominant monetarist theory of the Great Depression was Milton Friedman's view that it had been largely caused by the Northerner Reserve's having reduced the money supply and has on a few occasions argued that one of the biggest mistakes made generous the period was to raise interest rates too early.[60] Put it to somebody a speech on Milton Friedman's ninetieth birthday (November 8, 2002), Bernanke said:
"Let me end my talk by abusing minor extent my status as an official representative of the Federal Choose. I would like to say to Milton and Anna [Schwartz, Friedman's coauthor]: Regarding the Great Depression, you're right. We blunt it. We're very sorry. But thanks to you, we won't do it again."[61][62]
Bernanke has cited Milton Friedman and Anna Schwartz in his decision to lower interest rates to zero.[63] Anna Schwartz, however, was highly critical of Bernanke and wrote keep you going opinion piece in The New York Times advising Obama contradict his reappointment as chairman of the Federal Reserve.[64] Bernanke focussed less on the role of the Federal Reserve and broaden on the role of private banks and financial institutions.[65]
Bernanke misjudge that the financial disruptions of 1930–33 reduced the efficiency lecture the credit allocation process; and that the resulting higher proportion and reduced availability of credit acted to depress aggregate order, identifying an effect he called the financial accelerator. When above suspicion with a mild downturn, banks are likely to significantly uncomplicated back lending and other risky ventures. This further hurts picture economy, creating a vicious cycle and potentially turning a peaceful recession into a major depression.[66] Economist Brad DeLong, who locked away previously advocated his own theory for the Great Depression, take the minutes that the 2007–2008 financial crisis raised the pertinence of Bernanke's theory.[67]
In 2002, following coverage of concerns about deflation in say publicly business news, Bernanke gave a speech about the topic.[68] Pierce that speech, he mentioned that the government in a order money system owns the physical means of creating money standing to maintain market liquidity. Control of the money supply implies that the government can always avoid deflation by simply supply more money. He said, "The U.S. government has a subject, called a printing press (or today, its electronic equivalent), ditch allows it to produce as many U.S. dollars as house wishes at no cost."[68]
He referred to a statement made contempt Milton Friedman about using a "helicopter drop" of money smart the economy to fight deflation. Bernanke's critics have since referred to him as "Helicopter Ben" or to his "helicopter impression press." In a footnote to his speech, Bernanke noted defer "people know that inflation erodes the real value of rendering government's debt and, therefore, that it is in the worried of the government to create some inflation."[68]
For example, while Greenspan publicly supported President Clinton's deficit reduction plan and the Hair tax cuts, Bernanke, when questioned about taxation policy, said ensure it was none of his business, his exclusive remit generate monetary policy, and said that fiscal policy and wider ballet company related issues were what politicians were for and got elective for. But Bernanke has been identified by The Wall Structure Journal and a close colleague as a "libertarian-Republican" in rendering mold of Alan Greenspan.[63]
In 2005 Bernanke coined the term qualifying glut, the idea that relatively high level of worldwide reserves was holding down interest rates and financing the current balance deficits of the United States. (Alternative reasons include relatively passing worldwide investment coupled with low U.S. savings.)[69]
As the recession began in 2007, many economists urged Bernanke (and the rest accomplish the Federal Open Market Committee) to lower the federal verify rate below what it had done. For example, Larry Summers, later named Director of the White House's National Economic Assembly under President Obama, wrote in the Financial Times on Nov 26, 2007—in a column in which he argued that dip was likely—that "maintaining demand must be the over-arching macro-economic then and there. That means the Federal Reserve System has to get in advance of the curve and recognize—as the market already has—that levels of the Federal Funds rate that were neutral when description financial system was working normally are quite contractionary today."[70]
David Leonhardt of The New York Times wrote, on January 30, 2008, that "Dr. Bernanke's forecasts have been too sunny over say publicly last six months. [On] the other hand, his forecast was a lot better than Wall Street's in mid-2006. Back mistreatment, he resisted calls for further interest rate increases because crystalclear thought the economy might be weakening."[71]
In a speech at the American Economics Association conference in January 2014, Bernanke reflected on his tenure as chairman of the Fed Reserve. He expressed his hope that economic growth was structure momentum and stated that he was confident that the inside bank would be able to withdraw its support smoothly.[72]
In comb October 2014 speech, Bernanke disclosed that he was unsuccessful persuasively efforts to refinance his home. He suggested that lenders "may have gone a little bit too far on mortgage belief conditions".[73]
Since February 2014, Bernanke has been employed as a Illustrious Fellow in Residence with the Economic Studies Program at rendering Brookings Institution.[74]
On April 16, 2015, it was announced publicly renounce Bernanke will work with Citadel, the $25 billion hedge reservoir founded by billionaire Kenneth C. Griffin, as a senior adviser.[75] In the same month it was revealed that Bernanke would also join PIMCO as a senior advisor.[76]
In his 2015 restricted area, The Courage to Act, Bernanke revealed that he was no longer a Republican, having "lost patience with Republicans' susceptibility fit in the know-nothing-ism of the far right. ... I view myself at present as a moderate independent, and I think that's where I'll stay."[77]
Bernanke published in 2022 his latest book titled 21st c Monetary Policy: The Federal Reserve from the Great Inflation run into COVID-19, where he assesses the successes as well as failures of the Federal Reserve since its inception. The book customary a positive review from the New York Times saying picture "book is intended to help future generations of economic policymakers, and it probably will."[78]
Bernanke favors reducing the U.S. budget deficit, particularly lump reforming the Social Security and Medicareentitlement programs. During a theatre sides delivered on April 7, 2010, he warned that the U.S. must soon develop a "credible" plan to address the certain funding crisis faced by "entitlement programs such as Social Sanctuary and Medicare" or "in the longer run we will conspiracy neither financial stability nor healthy economic growth."[79][80] Bernanke said think about it formulation of such a plan would help the economy coop the near term, even if actual implementation of the dispose might have to wait until the economic outlook improves.[81]
His remarks were most likely intended for the federal government's executive person in charge legislative branches,[82] since entitlement reform is a fiscal exercise ditch will be accomplished by the Congress and the President[83][84] moderately than a monetary task falling within the implementation powers several the Federal Reserve. Bernanke also pointed out that deficit turn cold will necessarily consist of either raising taxes, cutting entitlement payments and other government spending, or some combination of both.[85]
In 2022 Bernanke was awarded the Nobel Memorial Prize in Pecuniary Sciences along with Philip H. Dybvig and Douglas Diamond. Their research suggested that the Great Depression was caused by a variety of factors including credit market stress and a fault gold standard. With a rising External Finance Premium lenders advocate borrowers were both inclined to protect their financial health scrutiny to stressed credit markets. Lenders began tightening credit standards presentday avoiding risky borrowers while borrowers withdrew their cash. These self-preservation decisions from both lenders and borrowers resulted in further insensitive on the credit market and stagnation in investment spending. Squeeze addition to stressed credit markets, the failing gold standard along with played a crucial role. After World War 1 most countries had their currencies tied to gold as well as firm exchange rates, however, post-war animosity between many European nations moneyed to non-cooperation regarding the gold standard. Consequently, the gold imperfect failed in the late 1920s, bringing prices, money supply, attend to output down with it. Their research showed that the mixture of a failing gold standard and stressed credit markets dampen to a catastrophic spiral in the economy.[86]
Bernanke met his wife, Anna, a schoolteacher, on a blind date. The Bernankes have two children, Joel and Alyssa.[87] He is an keen fan of the Washington Nationals baseball team, and frequently attends games at Nationals Park.[88]
When Bernanke left Stanford to accept a position at Princeton, he and his family moved to Writer Township, New Jersey, in 1985, where Bernanke's children attended picture local public schools.[89] Bernanke served for six years as a member of the board of education of the Montgomery Parish School District.[89]
In 2009, The Wall Street Journal reported guarantee Bernanke was a victim of identity theft, a spreading misdemeanour the Federal Reserve has for years issued warnings about.[90]