On Oct. 9, President Barack Obama nominated Yale alum Janet Yellen GRD ’71 to be the first-ever female chair of the Federal Reserve — a choice that colleagues and classmates have applauded.
Yellen, who has served as vice chair of the Federal Reserve since 2010, will fill the role that is currently held by Ben Bernanke, who will soon step down from the organization he has led since 2006. Before her nomination, Yellen was president of the Federal Reserve Bank of San Francisco, chair of the Council of Economic Advisers for the White House and an emeritus professor at the University of California-Berkeley. Since the announcement, the University community and Yellen’s Yale contemporaries have responded to her appointment with enthusiasm and support.
School of Management professor Sharon Oster said Yellen’s analytical abilities and common sense qualified her for the position. Oster added that Yellen may be influenced by the school of thought present in the Yale economics program during the 1970s, which valued an active role of government in the economy.
“Many people think this is a good time to have somebody of that [background], given the fragility of the macro-economy,” Oster said. In early September, Oster signed an open letter to Obama in support of Yellen, along with other Yale professors including Robert Shiller, William Brainard GRD ’63 and Ray Fair.
Yellen’s former classmates interviewed said they remember her presence on campus fondly. All three alumni interviewed said they remember her as exceptionally bright.
Jon Peck GRD ’71 said Yellen was famous for her class notes in a course taught by James Tobin, who won the Nobel Prize in Economic Sciences in 1981. She even distributed them to her fellow students to help them study, he said.
Even former students who did not personally know her said that they were aware of her presence on campus. Jill King, another classmate, said Yellen was diligent and studious.
“She really seems to have an understanding [of] what it takes to grow an economy and the need for policy that focuses more on employment and jobs,” said Edgar Francisco III GRD ’71. “She has been my candidate all along, since she is the perfect person to grow the economy.”
Some former classmates said Yellen seemed to be the obvious choice out of all the potential nominees, whose names had been floated in the media before the formal announcement was made. Peck said he believes Yellen is intelligent, experienced and has demonstrated her ability to work at a large institution like the Federal Reserve, adding that he thinks “Larry Summers would have been a disaster.”
Some professors said Yellen’s nomination has been yet another reflection of the success of the Yale Economics Department as a whole, especially coupled with Shiller’s Nobel prize this week.
In addition to being a graduate student at Yale, Yellen had also served as a member of the Yale Corporation from 2000 to 2006.
“Her service to the Corporation shows her willingness to give back to organizations that are important to her,” Oster said.
Former classmates noted that Yellen will likely need all of the experience and knowledge from the course of her career to handle the current challenges of the U.S. economy. Peck said he believes Yellen knows “what she is getting in for,” but that she will still have her hands full.
But Oster noted that Yellen seems prepared for the role, since she has already faced a level of adversity common to women studying economics during her time.
“She always spoke with authority, but with a sense of humor, and I believe that those traits will come in handy as Fed Chair,” Oster said.
Yellen received the Wilbur Cross Medal from Yale in 1997, which honors distinguished achievements in scholarship, teaching, academic administration and public service.