Who is alan greenspan

Greenspan was born in New York City. Before receiving his doctorate, he studied economics at Columbia University in the early s under Arthur Burns, who would later become chairman of the Board of Governors. Shortly after assuming office as chairman of the Board of Governors, Greenspan was faced with the October stock market crash and acted quickly to ensure liquidity in the markets. During his tenure he also led the Federal Reserve through several events with major economic repercussions, including two US recessions, the Asian financial crisis of , and the September 11, , terrorist attacks.

He had a reputation for being strongly anti-inflation, focusing more on controlling prices than on promoting full employment. Many credit Greenspan with facilitating the longest official economic expansion in US history. If he often behaved passively, it was partly because he was hemmed in by these constraints. Most importantly, Mallaby argues, Greenspan should have kept policy tighter than he did during and , to fight the tech bubble and the housing bubble, respectively. The status quo for monetary policy, which involved targeting consumer price inflation, was comfortable, something that Greenspan understood well, he argues.

Likewise, the expectations of politicians and the public, which created the enabling environment around the Fed, would have required reshaping.

For a man who was averse to picking unnecessary fights, it was all too daunting…. In short, Greenspan knew that financial instability mattered. But he focused instead on inflation for a simple and not entirely good reason. Controlling asset prices and leverage was hard; fighting inflation was easier. Both of these contentions are, well, contentious, and this book does not add much to long-running debates.

For example, as Mallaby discusses, Greenspan was frustrated by the lack of Congressional response to his early and frequent warnings about the government-sponsored enterprises, Fannie Mae and Freddie Mac. Supported by both banks and the housing industry, and with huge profits available to use to advance their political goals, the GSEs were basically untouchable in the years before their shocking demise in However, although the political forces blocking GSE reform were indeed powerful, there were other ways in which a counterfactual Greenspan—one convinced that tougher financial regulation was necessary—might have had a meaningful effect.

Second, more concretely, during this period the Fed already had in hand regulatory authorities in banking supervision and consumer protection. There is implicit self-criticism here, since I was on the Board of Governors from late to early To be sure, as I discuss in chapter 5 of my memoir, The Courage to Act , these authorities were not immune to political influences. Moreover, regulatory fragmentation posed practical challenges, e.

With the very substantial benefit of hindsight, these tools could probably have been used more aggressively to tackle not only bad mortgage lending but also risky banking practices, like the proliferation of off-balance sheet vehicles and poor liquidity management. In short, it would have been asking a lot of Greenspan—given his own inclinations and the prevailing intellectual winds—to have taken a more proactive regulatory stance in the years before the crisis. On monetary policy: This is not the place to re-litigate the long-running debate on whether, in setting short-term interest rates, central banks should give heavy weight to financial stability concerns.

I discussed monetary policy and the housing bubble here ; see also this blog post and chapter 5 of my memoir. He missed being first by four months. Although multiple drug makers have announced encouraging results from their vaccine trials, infection rates are still on the rise around the world, as well as in the United States. Read More. Trying to forecast where the virus is going at this stage is little more than a guess, Greenspan said. It might be possible to get back to normal by next spring, he added, but only if the virus's spread is controlled and stays that way.

Alan Greenspan on the Fed's pandemic response Current Fed Chairman Jerome Powell has repeatedly said that the economy will fully recover only when the Covid pandemic is under control. Even then, we likely won't go back to the economy we knew before the pandemic hit. Mario Rojas Miranda. The Economic Journal, Volume , Issue , Federal Reserve. Monetary Policy. Your Privacy Rights. To change or withdraw your consent choices for Investopedia.

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Who Is Alan Greenspan? Greenspan's policy was defined by the Great Moderation, or the long-term maintenance of low, stable inflation and economic growth. The expansionary monetary policy of "easy money" attributed to Greenspan's tenure has been blamed in part for stoking the dot-com bubble and the financial crisis.

Greenspan's time as chair began with the immediate challenge of dealing with the historic stock market crash. Greenspan is considered by some to be hawkish in his concerns over inflation. He received criticism for focusing more on controlling prices than on achieving full employment. Alan Greenspan served as Chairman of the Fed from to , for a total of five terms. Who Appointed Alan Greenspan? Who Replaced Alan Greenspan? How Old Is Alan Greenspan?