Stanley Fischer was officially nominated Friday as a Governor and Vice Chairman of the Federal Reserve, the job Janet Yellen is vacating as she becomes Chairwoman.
While Yellen is incredibly qualified, it’s exciting to have Fischer beside her.
He’s a legend in central banking and economics circles, and for good reason. Fischer’s a highly accomplished monetary economist, and excelled as Israel’s central banker.
When rumours of his nomination cropped up, Morgan Stanley’s Vincent Reinhart wrote that it would create a “Fed Dream Team.”
There’s a longer profile of Fischer from the Washington Post’s Dylan Matthews that’s worth reading, but here are a few of the reasons his nomination is great news.
- He’s credited with essentially saving the Israeli economy, the economy barely faltered during the global financial crisis.
- Fischer’s sceptical of forward guidance as a policy tool, something Yellen endorses, which hopefully means he’ll bring debate and an outside viewpoint to Fed meetings.
- While other countries were still struggling in the depths of recession or depression, Fischer actually raised rates in Israel in 2009, basically saying that the crisis was over for the country. It’s the ultimate central banking power move.
- He aggressively manipulated the country’s currency, the Shekel, and the massive devaluation helped the country keep growing.
- Israeli politics might be even more dysfunctional than the U.S. congress, but Fischer still got the job done, and is hugely respected in the country.
- Fischer was Ben Bernanke’s thesis advisor at MIT, probably the world’s best economics department, and advised other famous economists like ECB Chief Mario Draghi and Harvard’s Greg Mankiw.
- “Fischer has been around the inner circle of international economic policymaking for three decades,” Morgan Stanley’s Vincent Reinhart wrote in a research note. “If he was not at a major meeting in person, one of his students from his long tenure at MIT probably was.”
- He is a brilliant academic economist, and one of the fathers of New Keynesian economics, which is the dominant approach in leading departments.
- He has some fascinating and unconventional views on monetary policy, and arguably a de facto champion of NGDP targeting.
- The rest of his résumé is equally stellar, he helped resolve the Asian financial crisis of the late ’90s at the IMF, and rose to a top job at Citigroup
It’s difficult to think of a more qualified or interesting choice for an essential job.
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