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The Yellen nomination: Robin Harding of the FT collects some quotes…

Brad DeLong, professor of economics | October 9, 2013

Robin Harding: Warm welcome to Yellen nomination:

  • “Janet Yellen is a terrific choice to lead the Federal Reserve. I have admired and learnt from her ever since she taught my first macroeconomics graduate class in 1976” — Larry Summers
  • “Janet is smart, collegial, and experienced. She is the perfect person to lead the Fed at this critical time” — Christina Romer
  • “Personally, I’m delighted… [she has] superior, intellectual equipment…. Whenever it happens, it’ll be under her watch that we change course [on monetary policy] and it’s going to take extraordinary skill to judge when that occurs and how to communicate it” –Richard Fisher
  • “[She has a] substantial academic background and is also a very, very solid policy maker with tremendous good sense” — José Viñals

And let me add:

  • “I do not think any chair nominee ever has been better prepared to take the job than Janet Yellen is right now. And I think it is good that she is so prepared. If Obama does nominate her in the Senate does confirm her, she will face challenges of the same order of magnitude that Paul Volker and Marriner Eccles faced. It is news that does make me sleep easier” — Brad DeLong

Comments to “The Yellen nomination: Robin Harding of the FT collects some quotes…

  1. What does he mean when Larry Sommers’ postulates at the IMF that we are in an age of negative interest rates (or as Krugman calls it, a “liquidity trap”)? It means no one believes the future will be prosperous, and they believe that past accumulated wealth is the “only” wealth and that therefore past accumulated wealth must be valued and clutched onto to such an extent that a controlled negative erosion of that wealth (a negative interest rate) is more tolerable than the risk of investing (betting) on any elusive prosperity-less future.

    Well, to combat this age of hoarding, the reward for hoarding should be abolished and the reward for investing should be raised. In practical terms, the 20% tax on interest and investment gains should be immediately bifurcated into a 40% tax on interest and a 0% tax on investment gains per the analysis of Msrs Sommers and Krugman.

    Tax policy, as well as fiscal stimulation, must supplant the “lower bound” constrained 0% interest rate policy currently being lamely administered by the Federal Reserve. The people have to have the courage and wisdom to empower their Congress to step up to the plate.

  2. When Janet Yellen’s appointment was still in doubt, the Economist published the following letter I wrote;

    SIR, There is an additional reason why The Economist is prudent to support Janet Yellen over Larry Summers as the next Federal Reserve chairperson ( August 31). Summers is the prototypical alpha male and as The Economist suggested he would be “less predictable” and more likely “to unsettle the markets with unscripted comments.” In fact, sober scientific studies show that men with high testosterone levels tend to make more risky financial decisions than women. Conversely women are likely to make better long-term financial decisions. Summers himself had to resign as Harvard President for suggesting that men and women have different attributes, but when it comes to financial decision making he may have been correct. A women Federal Reserve chairperson will serve the country better than a competitive, occasional volatile man.
    University California, Berkeley, July 26, 2013.

    The paper I quoted was Apicella, CL, Dreber A, Campbell B, et al .Testosterone and financial risk taking. Evolution and Human Behavior 29:384-3939. 2008.

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