University News

Yellen ’67 tapped for Fed

By
Contributing Writer
Thursday, March 25, 2010

Janet Yellen ’67, the president of the Federal Reserve Bank in San Francisco, has been nominated by President Barack Obama to serve as vice chairwoman of the Federal Reserve Board of Governors.

The Board of Governors is the main branch of the Federal Reserve System, the central banking system in the United States. If confirmed, Yellen will replace Donald Kohn in the second highest Fed position in the country.

Yellen wrote in an e-mail to The Herald that, if confirmed to the position, she hopes to help the Federal Reserve work towards its two key macroeconomic goals: full employment and price stability.

“We need to foster a great deal of job creation to achieve the first goal,” Yellen wrote.
She wrote that another goal of the Federal Reserve is to supervise banking organizations and monitor developments that could threaten the financial system, especially in light of the current recession.

Yellen wrote that she is “strongly committed to price stability,” and has voted 20 times to “raise interest rates in order to contain inflationary pressures.” She predicted that the inflation level will sink even lower than its present level because of the historically high unemployment rate and low rate of wage increases.

Yellen has held the position of president of the Federal Reserve Bank in San Francisco since 2004, and chaired the Council of Economic Advisors under the Clinton Administration, according to the Christian Science Monitor.

Before that, she taught at the London School of Economics and, at present, is a professor at University of California at Berkeley’s Haas School of Business. After graduating from Brown, she went on to earn her doctorate in economics from Yale, and received an honorary degree from Brown in 1998.

As a Brown graduate of the late 1960s, Yellen remembers the debate around the changes in the curriculum. Overall, she wrote she has fond memories of her college days and is grateful to Brown for providing her with a well-rounded education.

“I discovered economics as a field of study, was excited by the coursework I took in that field, and am thankful that I found my life’s work in the process,” Yellen wrote. “I also greatly enjoyed remarkable courses that I took in fields as diverse as art history, architecture, the philosophy of science, Russian literature and geology.”

Professor of Economics George Borts, who was chairman of the department when Yellen was an undergraduate, said he was not surprised by her success.

“She was very sharp and quick-witted,” he said. “It was clear she was going to have a good career in economics. She was very interested in the field and she picked good advisers.”

Though Borts said it was too early to pinpoint Yellen’s policies should she be appointed to the position, he said he had confidence in her ability to govern.

“I expect her to be pretty independent,” he said. “She’s not there to follow a party line. She follows her own instincts and intelligence.”