Janet Yellen, vice chair of the Board of Governors of the Federal Reserve and a professor emerita at UC Berkeley, is one of two individuals currently being considered by President Barack Obama to replace Ben Bernanke as chair of the Federal Reserve.
Yellen is a professor emerita of economics at Haas School of Business, and if appointed, she would be both the first female and first UC Berkeley professor to serve as chair of the Fed.
Larry Summers, who was previously U.S. Secretary of the Treasury, director of the National Economic Council and president of Harvard University, is also being considered. Obama is expected to select either Yellen or Summers for the position at the end of August.
Yellen received her doctorate in economics from Yale University in 1971 and began her career at UC Berkeley in 1980 as a macroeconomics professor at the Haas school. In 1985 and 1988, Yellen received the school’s Earl F. Cheit Award for Excellence in Teaching.
“Janet was always a phenomenal teacher — partly because she worked very, very hard at it,” said David Levine, an economics professor at the business school, whom Yellen mentored. “She thought about literally every word she would say. As she has moved up in government, this level of thoughtfulness and reflection has always been increasingly important — and as a high official of the Federal Reserve system, where literally, the placement of a comma can move the markets.”
Yellen’s experience working at the Fed includes serving as a member of its board of governors and as president of the Federal Reserve Bank of San Francisco. She was also chair of Bill Clinton’s Council of Economic Advisers.
While Yellen and Summers rival each other in academic and government experience, their economic values are on opposite ends of the ideological spectrum.
Yellen advocates economic regulation, supports the usage of stimulus plans to boost the economy and is expected to continue Bernanke’s policies if appointed. Summers supports policies of economic deregulation, but following the economic crisis of 2008, he has openly stated that he wants more regulation of Wall Street transactions.
Although Henry Brady, dean of the Goldman School of Public Policy, acknowledges that Yellen and Summers have “tremendous ideological differences,” he said they would both know how to handle the responsibilities of the Fed, like knowing when to ease up on monetary expansion.
Campus economics professor Brad DeLong, who worked with Summers as deputy assistant secretary of the U.S. Department of the Treasury when Summers was treasury secretary, enthusiastically supported Yellen’s appointment but has been vocal about his preference for Summers for the position.
“Larry Summers has an edge as the most creative thinker likely to successfully think outside the box should outside-the-box thinking be called for, and least likely to bind himself to an institutional consensus past its sell-by date,” DeLong wrote in a New York Times article.
Andrew Rose, an economics professor at the Haas school, has known Yellen for 28 years and says that Yellen is very persuasive, easily forms a consensus and is very calm and collected.
“One of the gripes about her is that it isn’t clear how well she will respond to a crisis, but we went through the Loma Prieta earthquake together in Barrows Hall,” Rose said. “We really both thought that the building was going to collapse, but she stayed quite calm during the earthquake, which is a pretty impressive thing.”
Brady also believes that if Yellen is appointed to the chair position, her well-developed inner circle will allow her to transition smoothly into the position.