Ben Bernanke addressed Princeton graduates earlier this month and spoke about the uncertainty of the future and life after graduation. Now the Federal Reserve looks to the uncertainty of its own future as Bernanke graduates from his term as Federal Reserve chairman.
In a recent interview, President Barack Obama let slip that Bernanke “already stayed a lot longer than he wanted or he was supposed to.” But with the chairman’s term ending in January, the comment has already prompted much discussion over who his possible successor might be.
The most likely candidate is Janet Yellen, Federal Reserve vice chairwoman. Yellen, who stands at about 5 feet tall, is a force of intellect to be reckoned with. She speaks with tremendous experience and eloquence through a slight Brooklyn accent. Her powers of persuasion are so sharp that she argued Alan Greenspan into conceding that a little inflation can be a good thing.
Yellen studied economics at Yale under Nobel Prize winning economist, James Tobin, in 1971. Her notes on his writings were so meticulous they were published shortly thereafter. After teaching at Harvard, Yellen worked at the Federal Reserve where she met her future husband and future Nobel Laureate, George Akerlof. After adding the London School of Economics and UC Berkeley to the litany of her academic achievements, she was appointed as vice president of the Federal Reserve in 1994.
Her penchant for detail translates into her outlook on economics, which is “micro-based macro economics,” according to Joseph Stiglitz, a friend and former professor. She penned a well-known paper arguing that a sense of fairness strongly influences labor productivity. Given her strong background on unemployment, some are concerned she might let inflation run rampant.
As for the current chairman, Ben Bernanke, Princeton might find it hard to refuse the world-renowned public servant his old position as professor if he chooses to resign. But January is far away and it is unwise to speculate too much. As the chairman said in his commencement address, "Don't be afraid to let the drama play out."