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Yellen’s Nomination To Lead Fed Celebrated By UC Berkeley Colleagues

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Janet Yellen

Janet Yellen, vice chairman of the U.S. Federal Reserve. (Andrew Harrer/Getty Images)

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BERKELEY (CBS SF) — Janet Yellen’s colleagues and friends at the University of California at Berkeley on Wednesday celebrated her nomination by President Barack Obama to be the next chair of the Federal Reserve.

If Yellen, 67, is confirmed by the U.S. Senate, she would be the first woman to head the central bank, which manages the nation’s money supply and sets economic policy to promote the twin goals of stable prices and maximum sustainable output and employment.

She would succeed Ben Bernanke, who will step down in January.

Yellen is an emeritus professor at the UC Berkeley’s Haas School of Business, where she taught macroeconomics from 1980 to 2006. She’s also a former president and chief executive of the Federal Reserve Bank of San Francisco.

Yellen, a native of Brooklyn, is married to George Akerlof, a UC Berkeley economist and emeritus professor. Akerlof won the Nobel Prize in economics in 2001, along with Joseph Stiglitz, who had been one of her professors when she earned her Ph.D. at Yale University.

Berkeley-Haas Dean Rich Lyons said of Yellen in a statement Wednesday, “I could not think of a sharper mind or a more thoughtful citizen to lead the world’s most influential central bank in its effort to regain the economy’s full potential. She is part of a rich and proud history of Haas faculty who continue to serve the nation at the highest levels of government.”

James Wilcox, a Berkeley-Haas professor and former senior economist at the Federal Reserve, said “Janet Yellen has the knowledge, the experience inside and outside the Fed, the experience inside and outside of Washington, and the temperament to lead the Fed effectively, especially in the conditions that the economy faces and will perhaps face over the next few years.”

Wilcox added, “By force of her arguments, openness to those of others, and record of accomplishments, Yellen has earned great credibility with and the respect of central bankers here and abroad, of economists, of business, of legislators, and of policy analysts.”

Earl Cheit, dean emeritus of Berkeley-Haas, said, “I hired her and have been pleased ever since. At the Haas School, her colleagues and students admired her scholarship and her teaching.”

Cheit said, “As a dean, I especially admired her willingness to be an institution builder. To me, her defining characteristic is quiet competence.”

Berkeley-Haas officials said much of Yellen’s research at the university focused on unemployment and labor markets, monetary and fiscal policies, and international trade and investment policy.

Earlier this year, she was named a Berkeley Fellow, joining an honorific society of friends of UC Berkeley who have been chosen in recognition of their contributions to the campus.

Yellen is known for being an “easy money” advocate who favors low interest rates to try to help boost the economy and reduce unemployment.

Yellen said the Fed is actively promoting a faster economic recovery by large-scale purchases of assets such as government bonds, also known as quantitative easing, and communications about the future course of monetary policy, known as forward guidance.

In a speech to Berkeley-Haas students at the International House on campus last November, Yellen said the Fed is actively promoting a faster economic recovery by large-scale purchases of assets such as government bonds, also known as quantitative easing, and communications about the future course of monetary policy, known as forward guidance.

Yellen said the Federal Reserve may need to keep interest rates close to zero until early 2016 to implement its “balanced approach” to meeting its mandated goals of achieving full employment and stable prices.

She said keeping interest rates low for a longer period of time would generate a faster reduction in unemployment but might “slightly overshoot” the Fed’s goal of keeping the inflation rate at 2 percent or lower.

(Copyright 2013 by CBS San Francisco and Bay City News Service. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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