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Fischer, the Fed, and US Growth

CAMBRIDGE – Now that Janet Yellen has been confirmed as Chair of the US Federal Reserve Board, attention has turned to her successor as Vice Chair. US President Barack Obama's choice, Stanley Fischer, was the perfect candidate, given his unique combination of skills, qualities, and experience.

During his academic career, Fischer was one of the most accomplished scholars of monetary economics. He then served as Chief Economist of the World Bank, First Deputy Managing Director at the International Monetary Fund, and, most recently, as Governor of the Bank of Israel. He starred in each of these positions. Indeed, one has trouble thinking of another economist (at least since John Maynard Keynes) who has done as well as Fischer at combining analytical skill, sound policy judgment, clear expression, selfless dedication to improving the world, and the ability to get things done – with imperturbable good humor.

Moreover, Fischer gained extensive crisis-management experience during his tenure at the IMF in the 1990’s and as Israel’s central banker during the 2008-2009 global financial crisis. That makes him an ideal match for Yellen, who is also an unusually accomplished academic and policymaker, but who is at her best when she has had a chance to prepare meticulously.

Fischer’s qualities were acclaimed last month at the IMF’s Annual Research Conference by, among others, outgoing Fed Chairman Ben Bernanke, who in the 1970’s was one of Fischer’s many MIT doctoral students (as was I).