Who is Janet Yellen? What is it known for?

Janet Louise Yellen is an American economist and educator. She is the first woman to head the United States Department of the Treasury and the Federal Reserve. She is the first person in history to head both groups and the White House Council of Economic Advisers. Yellen is also the Eugene E. and Catherine M. Trefethen Professor Emeritus in Business Administration at the Haas School of Business.

In nominating her to head the Fed, former President Barack Obama called Yellen “one of the nation’s leading economists and legislators,” who is “recognized for her good judgment and ability to build consensus.”

Key takeaways

  • Janet Louise Yellen is the first woman to serve as the United States Secretary of the Treasury.
  • Yellen was the first woman to serve as chair of the Federal Reserve Board.
  • He chaired the White House Council of Economic Advisers under former President Bill Clinton.
  • As a policy advisor, she is a pigeon and a Keynesian economist who believes that economic markets require government regulation and who values ​​low unemployment over low inflation.

Early age and education

Janet Yellen was born into a middle-class Jewish family in Brooklyn, New York, on August 13, 1946. Her mother, Anna Ruth, was an elementary school teacher and her father, Julius, was a doctor who treated patients outside of the stone. reddish of the family. Janet Yellen eventually became editor of the Fort Hamilton High School newspaper, from which she graduated as a valedictorian. He graduated summa cum laude with a degree in economics from Brown University in 1967 and later received his doctorate. from Yale University in 1971.

She then held the position of professor at several prestigious universities, including Harvard, The London School of Economics. and the University of California at Berkeley. From 1977 to 1978, he worked for the Board of Governors of the Federal Reserve as an economist.

Notable achievements

Yellen served as a member of various economic committees and councils, including the Organization for Economic Cooperation and Development (OECD), the Council of US Economic Advisers, and the American Economic Association. She was also an advisor to the Budget Office of the United States Congress. She was a research associate at the National Institute for Economic Research and served on the board of directors of the Pacific Council on International Policy. He has also received scholarships for the National Association for Business Economics, MIT, and the Guggenheim.

Yellen began working for three decades in the Federal Reserve System when she served as governor of the Federal Reserve Board from 1994 to 1997. In 2004, she became President and Chief Executive Officer (CEO) of the Federal Reserve Bank. from San Francisco. , where he was credited with predicting the subprime crisis more accurately than his peers.

At the Federal Reserve Board

Yellin was appointed vice chairman of the Federal Reserve for a four-year term on October 4, 2010 by then-President Obama. Yellen used his position to convince the Fed to use a 2% annual target for inflationary growth. Democrats urged Obama to appoint Yellen as chairman of former Treasury Secretary Larry Summers because of her “impeccable resume, her focus on unemployment and her strong track record as a banking regulator.”

Obama nominated Yellen on October 9, 2013 to become the first female chairman of the Federal Reserve Board, succeeding Ben Bernanke. Yellen, who took office in February 2014 as the Fed’s 15th presidency, was tasked with keeping the economy’s gradual recovery on track.

Her four-year term was scheduled to end on February 3, 2018. On November 2, 2017, then-President Donald Trump decided not to offer her a second term and nominated Jerome Powell to replace her. Trump called her “a wonderful woman who has done an excellent job,” but her support for financial regulations possibly hurt her chances of continuing in office.

Yellen was scheduled to remain a member of the Board of Governors of the Federal Reserve System until 2024. But on November 20, 2017, he announced his resignation from the Federal Reserve Board as soon as Jerome Powell was sworn in. She was the first president in nearly 40 years not to receive a second term.

United States Secretary of the Treasury

President Joe Biden nominated Janet Yellen as the 78th chief of the United States Treasury and the Senate confirmed her as Secretary of the Treasury on January 26, 2021. “She has spent her career focused on unemployment and the dignity of work,” said Biden, “She understands what it means to people and their communities when they have good and decent jobs.”

Janet Yellen received the 2017 Paul H. Douglas Award for Ethics in Government. During her acceptance speech, she said: “The very effectiveness of the Federal Reserve in setting monetary policy depends on the public’s assurance that we act only in your interest “.

Economic philosophy

Yellen is a staunch economic pigeon (she supports low interest rates and expansionary monetary policies, values ​​low unemployment rather than keeping inflation low). Much of the research you did as an academic economist focused on employment. She and her husband, George Akerlof, are Keynesian economists who believe that economic markets need government regulation to function properly.

Both have created economic models, such as the efficiency wage theory, which shows how companies seeking to maximize profits would pay more than minimum wages.

The efficiency wage theory model was a rebuttal to conservatives like Robert Lucas, who argue that flexible wages and prices would allow the economy to reverse and form more easily after market disruptions. These models helped form the basis of New Keynesian philosophy.

Yellen was the first Democrat to chair the Fed in nearly 30 years, but he stressed the importance of the Fed being independent of political processes and not partisan. As president, she sought to emulate the philosophy of James Tobin, an economist who believed that an economy can be rescued from recession through government intervention.

While in public view, Yellen followed Bernanke’s cautious approach, using meticulously researched data and a technocratic way to minimize surprise announcements or other releases that could shake the markets. She supported Bernanke’s bond buyback program and continued her stimulus campaign. During his tenure, he also tightened financial and banking regulations to prevent a repeat of the financial abuses that led to the 2007-09 financial crisis.

During the latter part of his term, Yellen advocated “gradual rate hikes”, believing that a sharp rate hike could hit the economy with an “adverse shock.” While the Federal Reserve does not focus directly on the performance of the stock market, the S&P 500 has performed 46% since taking over as Fed chair in 2014, an average of more than 10% per year.

Personal life

While working at the Federal Reserve in 1977, Yellen met economist George Akerlof. They were married in 1978 and have a son, Robert, who is a professor of economics.

Yellen is also an avid stamp collector.

The bottom line

Janet Yellen is a renowned American economist who has achieved two first achievements in American history: the first woman to become Chairman of the Federal Reserve and the first woman to become Secretary of the Treasury. His accomplishments cap a long career of public service at the Federal Reserve.

In policy terms, it is an economic and Keynesian pigeon, believing that economic markets require government regulation and valuing low unemployment over low inflation.


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About the author

Mark Holland

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