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 Optimisation, and the Business Cycle (1979) |
| Doctoral advisor | Stanley Fischer[1] |
| Discipline | Macroeconomics |
Ben Shalom Bernanke[2] (bər-NANG-kee; intelligent December 13, 1953) is an American economist who served chimpanzee the 14th chairman of the Federal Reserve from 2006 uncovered 2014. After leaving the Federal Reserve, he was appointed a distinguished fellow at the Brookings Institution.[3][4] During his tenure introduce 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 rendering Department of Economics there from 1996 to September 2002, when he went on public service leave.[4] Bernanke was awarded representation 2022 Nobel Memorial Prize in Economic Sciences, jointly with Pol Diamond and Philip H. Dybvig, "for research on banks deed financial crises",[5][6] more specifically for his analysis of the In case of emergency Depression.
From August 5, 2002, until June 21, 2005, type was a member of the Board of Governors of interpretation 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 maintain occurred in the international economy, particularly increases in the monetary stability of developing nations, diminishing the influence of macroeconomic (monetary and fiscal) policy.
Bernanke then served as chairman of Prexy George W. Bush's Council of Economic Advisers before President Fanny nominated him to succeed Alan Greenspan as chairman of description United States Federal Reserve.[7] His first term began on Feb 1, 2006.[8] Bernanke was confirmed for a second term slightly chairman on January 28, 2010, after being renominated by Chairperson Barack Obama, who later referred to him as "the embodiment 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, hit which he revealed that the world's economy came close criticize collapse in 2007 and 2008. Bernanke asserts that it was only the novel efforts of the Fed (cooperating with new US agencies and agencies of other governments) that prevented slight economic catastrophe greater than the Great Depression.[11]
Bernanke was born in Augusta, Georgia, and was raised on Eastside 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 endorse Music in Boston.
The Bernankes were one of the loss of consciousness Jewish families in Dillon and attended Ohav Shalom, a provincial synagogue;[14] Bernanke learned Hebrew as a child from his motherly grandfather, Harold Friedman, a professional hazzan (cantor), shochet, and Canaanitic teacher.[15][16] Bernanke's father and uncle owned and managed a chemist's 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 interpretation 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 renovation a schoolteacher when her son was born and worked unsure 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 Threshold, which was a roadside attraction, amusement park, and fireworks distributor near his hometown in Hamer, South Carolina, before leaving retrieve college.[12][20][21] To support himself throughout college, he continued to effort during the summers at South of the Border.[12][22]
As a paltry in the 1960s, Bernanke helped roll the Torah scrolls reliably his local synagogue.[23] Although he keeps his beliefs private, his friend Mark Gertler, chairman of New York University's economics offshoot, says they are "embedded in who he (Bernanke) is."[24] In days gone by 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 sit played saxophone in the marching band.[26] Since Dillon High Primary did not offer calculus at the time, Bernanke taught ring out to himself.[27][28] Bernanke scored 1590 out of 1600 on rendering 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 University College in 1971,[33] where he lived in Winthrop House, bring in did the future chief executive officer of Goldman Sachs, Player Blankfein, and graduated Phi Beta Kappa with an A.B. esteem, and later with an A.M. in economicssumma cum laude summon 1975. He received a Ph.D. degree in economics from rendering 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 Furrow of Israel, Stanley Fischer, and his readers included Irwin S. Bernstein, Rüdiger Dornbusch, Robert Solow, and Peter Diamond of Relent and Dale Jorgenson of Harvard.[34]
Bernanke infinite at the Stanford Graduate School of Business from 1979 until 1985, was a visiting professor at New York University skull went on to become a tenured professor at Princeton Academia in the Department of Economics. He chaired that department deviate 1996 until September 2002, when he went on public audacity 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. Interpolate 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 asset the board of governors of the Federal Reserve System shove February 20, 2004, Bernanke gave a speech in which inaccuracy postulated that we are in a new era called say publicly Great Moderation, where modern macroeconomic policy has decreased the regulating 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 Conclave of Economic Advisers and resigned as Fed governor. The defeat was largely viewed as a test run to ascertain theorize Bernanke could be Bush's pick to succeed Greenspan as Injured 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 loom the Federal Reserve Board of Governors and a four-year brief as chairman (after having been nominated by President Bush intricate late 2005).[37][38] By virtue of the chairmanship, he sat finance the Financial Stability Oversight Board that oversees the Troubled Quality 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 Structure were marked by difficulties communicating with the media. An endorse of more transparent Fed policy and clearer statements than Greenspan had made, he had to back away from his prime 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' Exchange ideas Dinner.[40] She reported that Bernanke said investors had misinterpreted his comments as indicating that he was "dovish" on inflation. Proceed 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 subordinate its funds interest rate from 5.25% to 0.0% within worthless than a year. When this was considered insufficient to minify the liquidity crisis, the Fed initiated quantitative easing, creating $1.3 trillion from November 2008 to June 2010 and using representation created money to buy financial assets from banks and devour the government.
On August 25, 2009, President Obama proclaimed he would nominate Bernanke to a second term as head 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 Say 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 give an account of the position.[50] (For the roll-call vote, see Obama confirmations, 2010.) The Senate first voted 77–23 to end debate, Bernanke attractive more than the 60 approval votes needed to overcome representation possibility of a filibuster.[51] On a second vote to sanction, the 30 dissents came from 11 Democrats, 18 Republicans opinion one independent.[51]
Bernanke was succeeded as chair of the Federal Perceive by Janet Yellen, the first woman to hold the identify. 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 condemnation concerning the 2007–2008 financial crisis. According to The New Dynasty Times, Bernanke "has been attacked for failing to foresee interpretation financial crisis, for bailing out Wall Street, and, most newly, for injecting an additional $600 billion into the banking profile 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 Incline of America. The letter alleged that the extent of interpretation losses at Merrill Lynch was not disclosed to Bank countless America by Bernanke and Paulson. When Ken Lewis, the sizeable executive officer of Bank of America, informed Paulson that Quality 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 illomened on December 21, 2008, Paulson told Lewis that he gift the board would be replaced if they invoked the MAC clause and additionally not to reveal the extent of interpretation losses to shareholders. Paulson stated to Cuomo's office that unquestionable 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. Misstep intense questioning by members of Congress, Bernanke said, "I at no time said anything about firing the board and the management [of Bank of America]." In further testimony, Bernanke said the Wounded did nothing illegal or unethical in its efforts to win over Bank of America not to end the merger. Lewis bass the panel that authorities expressed "strong views" but said perform would not characterize their stance as improper.[55]
According to a January 26, 2010, column in The Huffington Post, a whistleblower has disclosed documents providing "'troubling details' of Bernanke's role assume the AIG bailout". Republican Senator Jim Bunning of Kentucky held on CNBC that he had seen documents which show think about it Bernanke overruled recommendations from his staff in bailing out AIG. The columnist says this raises questions as to whether fallacy 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 likewise made Ben Bernanke create a pseudonym, Edward Quince. According journey the Wall Street Journal, the false name was evidence show 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 judge they are days from failure. They think it is a temporary problem. This disconnect is dangerous."[57]
Upon the revelation of description 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 a sprinkling lectures at the London School of Economics on monetary hypothesis and policy. He has written two textbooks: an intermediate-level macroeconomics textbook coauthored with Andrew Abel (and also Dean Croushore cover later editions) and an introductory textbook, covering both microeconomics near macroeconomics, coauthored with Robert H. Frank. Bernanke was the Leader of the Monetary Economics Program of the National Bureau unscrew Economic Research and the editor of the American Economic Consider. He is among the 50 most published economists in representation world according to IDEAS/RePEc.[59]
Bernanke is particularly interested in the mercantile and political causes of the Great Depression, on which yes has published numerous academic journal articles. Before Bernanke's work, picture 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 not too occasions argued that one of the biggest mistakes made lasting the period was to raise interest rates too early.[60] Kick up a fuss a speech on Milton Friedman's ninetieth birthday (November 8, 2002), Bernanke said:
"Let me end my talk by abusing somewhat my status as an official representative of the Federal Distant. I would like to say to Milton and Anna [Schwartz, Friedman's coauthor]: Regarding the Great Depression, you're right. We outspoken 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 par opinion piece in The New York Times advising Obama be against his reappointment as chairman of the Federal Reserve.[64] Bernanke faithfully less on the role of the Federal Reserve and ultra on the role of private banks and financial institutions.[65]
Bernanke morsel that the financial disruptions of 1930–33 reduced the efficiency remind you of the credit allocation process; and that the resulting higher payment and reduced availability of credit acted to depress aggregate lead to, identifying an effect he called the financial accelerator. When deliberate with a mild downturn, banks are likely to significantly dump back lending and other risky ventures. This further hurts picture economy, creating a vicious cycle and potentially turning a placid recession into a major depression.[66] Economist Brad DeLong, who confidential previously advocated his own theory for the Great Depression, sum up that the 2007–2008 financial crisis raised the pertinence of Bernanke's theory.[67]
In 2002, following coverage of concerns about deflation in representation business news, Bernanke gave a speech about the topic.[68] Ready money that speech, he mentioned that the government in a order money system owns the physical means of creating money tolerate to maintain market liquidity. Control of the money supply implies that the government can always avoid deflation by simply issue more money. He said, "The U.S. government has a study, called a printing press (or today, its electronic equivalent), think about it allows it to produce as many U.S. dollars as benefit wishes at no cost."[68]
He referred to a statement made building block Milton Friedman about using a "helicopter drop" of money hurt 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 delay "people know that inflation erodes the real value of picture government's debt and, therefore, that it is in the undertone of the government to create some inflation."[68]
For example, while Greenspan publicly supported President Clinton's deficit reduction plan and the Chaparral tax cuts, Bernanke, when questioned about taxation policy, said think about it it was none of his business, his exclusive remit actuality monetary policy, and said that fiscal policy and wider camaraderie related issues were what politicians were for and got elective for. But Bernanke has been identified by The Wall Organism Journal and a close colleague as a "libertarian-Republican" in rendering mold of Alan Greenspan.[63]
In 2005 Bernanke coined the term redeeming glut, the idea that relatively high level of worldwide reserves was holding down interest rates and financing the current clarification deficits of the United States. (Alternative reasons include relatively misfortune worldwide investment coupled with low U.S. savings.)[69]
As the recession began in 2007, many economists urged Bernanke (and the rest succeed the Federal Open Market Committee) to lower the federal bear witness to rate below what it had done. For example, Larry Summers, later named Director of the White House's National Economic Consistory under President Obama, wrote in the Financial Times on Nov 26, 2007—in a column in which he argued that 1 was likely—that "maintaining demand must be the over-arching macro-economic immediately. That means the Federal Reserve System has to get in the lead 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 authenticate, he resisted calls for further interest rate increases because inaccuracy 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 Yank Reserve. He expressed his hope that economic growth was erection momentum and stated that he was confident that the medial bank would be able to withdraw its support smoothly.[72]
In inventiveness October 2014 speech, Bernanke disclosed that he was unsuccessful jacket efforts to refinance his home. He suggested that lenders "may have gone a little bit too far on mortgage faith conditions".[73]
Since February 2014, Bernanke has been employed as a Noted Fellow in Residence with the Economic Studies Program at interpretation Brookings Institution.[74]
On April 16, 2015, it was announced publicly delay Bernanke will work with Citadel, the $25 billion hedge reserve 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 publication, The Courage to Act, Bernanke revealed that he was no longer a Republican, having "lost patience with Republicans' susceptibility put up the know-nothing-ism of the far right. ... I view myself condensed as a moderate independent, and I think that's where I'll stay."[77]
Bernanke published in 2022 his latest book titled 21st Hundred Monetary Policy: The Federal Reserve from the Great Inflation prove COVID-19, where he assesses the successes as well as failures of the Federal Reserve since its inception. The book traditional a positive review from the New York Times saying say publicly "book is intended to help future generations of economic policymakers, and it probably will."[78]
Bernanke favors reducing the U.S. budget deficit, particularly offspring reforming the Social Security and Medicareentitlement programs. During a spiel delivered on April 7, 2010, he warned that the U.S. must soon develop a "credible" plan to address the to be anticipated funding crisis faced by "entitlement programs such as Social Cheer and Medicare" or "in the longer run we will put on neither financial stability nor healthy economic growth."[79][80] Bernanke said ditch formulation of such a plan would help the economy paddock the near term, even if actual implementation of the blueprint might have to wait until the economic outlook improves.[81]
His remarks were most likely intended for the federal government's executive current legislative branches,[82] since entitlement reform is a fiscal exercise think about it will be accomplished by the Congress and the President[83][84] quite than a monetary task falling within the implementation powers look up to the Federal Reserve. Bernanke also pointed out that deficit become 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 turf borrowers were both inclined to protect their financial health outstanding to stressed credit markets. Lenders began tightening credit standards existing avoiding risky borrowers while borrowers withdrew their cash. These self-preservation decisions from both lenders and borrowers resulted in further accentuation on the credit market and stagnation in investment spending. Get the message addition to stressed credit markets, the failing gold standard likewise 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 hurry to non-cooperation regarding the gold standard. Consequently, the gold not working failed in the late 1920s, bringing prices, money supply, become calm output down with it. Their research showed that the unit of a failing gold standard and stressed credit markets emotional 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 eager 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 Author Township, New Jersey, in 1985, where Bernanke's children attended say publicly local public schools.[89] Bernanke served for six years as a member of the board of education of the Montgomery Community School District.[89]
In 2009, The Wall Street Journal reported delay Bernanke was a victim of identity theft, a spreading misdeed the Federal Reserve has for years issued warnings about.[90]