If appointed chair of the Federal Reserve, UC Berkeley professor emerita Janet Yellen, the front runner for the position, will bring with her a wealth of economic experience from her time on campus and in other government posts.
Before Lawrence Summers withdrew his name from consideration Sunday, he and Yellen were widely considered President Barack Obama’s top choices — in that order — to succeed chair Ben Bernanke, whose term ends in January.
For more than a decade, Yellen has been involved in shaping monetary policy. She is vice chair of the Board of Governors of the Federal Reserve System and previously led Bill Clinton’s Council of Economic Advisers.
Yellen favors regulation — the stimulation and restraint of the economy through strategic management. The Fed, which manages the nation’s monetary policy, can exert influence over the economy through its capacity to manipulate interest rates.
In what is commonly referred to as its “dual mandate,” the Federal Reserve is primarily responsible for regulating inflation and unemployment, said Haas School of Business professor David Levine, who said Yellen has been a proponent of economic stimulation.
If selected as chair, Yellen likely would continue working to keep inflation stable, about 2 percent, said Haas professor Andrew Rose.
In her previous positions as a monetary policymaker, Yellen has voted to raise interest rates to curb inflation, said Haas professor James Wilcox, who has known Yellen for more than three decades.
As a candidate, Yellen has two key assets: a wealth of experience and a willingness to be open-minded, he said.
Yellen’s intellectual tenacity, paired with receptivity of opposing viewpoints, has been especially admired by her peers in academia.
“Sometimes data and analysis forces you to change your mind,” Wilicox said. “Willing to be intellectually nimble when that happens — given how fast the world is changing — I think that’s a really important asset. You could always get an open and fair hearing in terms of policy and ideas (from Yellen).”
As a researcher, Yellen did not write many papers, opting for quality over quantity, Rose said.
“She was a terrific academic colleague … because she’s smart as a whip,” Wilcox said, describing her macroeconomic perspective as modern, mainstream and much influenced by the events of the last decade.
Yellen was respected and well liked during her time on campus, according to her colleagues.
“She’s unassuming, smarter than she lets on (and) personable. … (It’s) one of the reasons she’s so effective,” Rose said.
Though Summers is out of the picture, Yellen has not yet been nominated for the post, and the Obama administration is considering other candidates as well. Still, some of Yellen’s colleagues are hopeful about her prospects.
“In my own view, I just think she’s the best person for the job,” Wilcox said.