Colleagues and friends at UC Berkeley are celebrating Haas School of Business Professor Janet Yellen’s nomination Oct. 9 by President Barack Obama to become the first woman to head the nation’s Federal Reserve Board of Governors.
If confirmed, Yellen will succeed current Fed Chair Ben Bernanke, who will step down in January 2014. The Federal Reserve Board is tasked with setting economic policy to promote price stability and employment, which she has described as “not just statistics to me.”
Yellen, the Eugene E. and Catherine M. Trefethen Professor Emeritus of Business Administration, taught macroeconomics for more than two decades at the Haas School, where much of her research 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 distinguished friends of UC Berkeley chosen in recognition of their contributions to the campus.
Yellen has served as vice chair of the Federal Reserve’s Board of Governors since 2010. She was president and chief executive officer of the Federal Reserve Bank in San Francisco from 2004 until 2010. She has been a vocal advocate for transparency of Federal Reserve policies and actions. Yellen also chaired the President’s Council of Economic Advisers from 1997 to 1999 during the Clinton administration.
“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,” said Berkeley-Haas Dean Rich Lyons, “She is part of a rich and proud history of Haas faculty who continue to serve the nation at the highest levels of government.”
Yellen is one of several female UC Berkeley professors who have successfully challenged the barriers to the White House’s primarily male circle of economic advisers. Like Yellen, her Berkeley-Haas colleague, Professor Laura Tyson, also chaired the President’s Council of Economic Advisers during the Clinton administration, and economics Professor Christina Romer held the job for four years in the Obama administration.
“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,” said James Wilcox, a Haas professor and former senior economist at the Federal Reserve.
“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,” added Wilcox.
A native of Brooklyn, Yellen studied economics at Brown University and earned a PhD at Yale University, studying under economist Joseph Stiglitz, who shared the 2001 Nobel Prize in economics with Yellen’s husband, UC Berkeley economist and Emeritus Professor George Akerlof, and Michael Spence of Stanford University.
Yellen spent 26 years – from 1980-2006 – as a Berkeley-Haas faculty member. She taught thousands of undergraduate and MBA students in required macroeconomics courses, and many more in graduate electives in international economics and trade. Her popularity with students twice earned her the school’s Earl F. Cheit Award for Excellence in Teaching, in 1985 and 1988. Yellen also held an affiliated appointment in the university’s economics department.
“I hired her and have been pleased ever since. At the Haas School, her colleagues and students admired her scholarship and her teaching,” said Earl “Budd” Cheit, dean emeritus of Berkeley-Haas. “As a dean, I especially admired her willingness to be an institution builder. To me, her defining characteristic is quiet competence.”
Yellen has drawn crowds to campus when delivering Federal Reserve speeches in recent years.
Former Yellen student Juan Manuel Matheu, MBA 04, is the chief executive officer with Banco Falabella in Santiago, Chile. He said he was impressed by Yellen’s “ability to listen respectfully to different points of view, contrast them with her clear ideas, and even incorporate part of them in her own thinking.”
Matheu recalled one class in which discussions started in the classroom and ended with Yellen and her students continuing the conversation with pizza in the Haas School courtyard. “She cares and embodies our values; she is the living example of all four of the Berkeley-Haas Defining Principles, especially ‘Confidence Without Attitude.’”
Colleagues and students across the campus have been watching the Federal Reserve nomination process with anticipation for months.
Yuriy Gorodnichenko, an economics professor specializing in macroeconomics and international economics, focused on just that at a recent fundraiser for graduate students. He auctioned a promise to pay $500 to the highest student bidder if Yellen – or Christina Romer – becomes Fed chair in the near future.
“I offered this to not only help raise funds for the graduate association, but also to draw attention to how prominent Berkeley faculty members are, not only in research, but also in policy,” he said. “It is pretty incredible.”
Updated from Oct. 9, 2013