Alum May Lead Fiscal Advisers

It must be something in the water. President George W. Bush nominated economist Ben S. Bernanke ‘75 to lead the Council of Economic Advisers (CEA) in a statement April 1.

If appointed, Bernanke would be the latest in a line of Harvard-affiliated economists to hold the post, following in the footsteps of former CEA Chairman N. Gregory Mankiw, Freed Professor of Economics, and current interim CEA Chairman Harvey Rosen, who earned a masters degree and Ph.D. at Harvard.

Mankiw said yesterday that Bernanke is a great fit for chairman of the CEA, the body charged with advising the president on current economic issues.

“There is a long tradition of economists leaving academia for a period of public service,” Mankiw said. “He will offer objective and sophisticated analysis. He is a superb economist and a fantastic choice.”

After completing his undergraduate work at Harvard, Bernanke traveled down the river to get his Ph.D. in economics at MIT.

Bernanke has been a faculty member at Princeton University for the last 20 years, where he is now Harrison and Beck Professor of Economics and Public Affairs, and was appointed to the Federal Reserve in 2002, according to a Princeton University press release. He was chair of Princeton’s economics department when he was named to the Federal Reserve Board.

Mankiw said he is not surprised that another Harvard-influenced economist will be taking the reins of the CEA.

“The CEA has a tradition of drawing the top talent and it is not surprising that a lot of top talent comes from top schools,” he said.

Despite the new leadership, Mankiw said he does not expect the CEA to see major changes from the trajectory set during his term of nearly two years.

“He and I have very similar views of how economics functions,” Mankiw said, though he added that Bernanke would probably change some minor aspects.

“The economics profession sees eye to eye on a lot of issues,” Mankiw said. “The CEA’s job is to present the consensus of economists to the President.”

The CEA is a three-member council whose self-described mission is “to provide the President with objective economic analysis and advice on the development and implementation of a wide range of domestic and international economic policy issues,” according to its website.

The CEA website describes the job of the chairman as twofold—to run the council and to present the council’s advice directly to the President.

There has been speculation among media outlets that Bernanke is eyeing the chairmanship of the Federal Reserve and this appointment might be a stepping stone taken in hopes of succeeding current Chairman Alan Greenspan, who intends to vacate the job at the end of his current term on Jan. 31, 2006. However, Mankiw said that these conclusions are premature.

“He is taking the job because he wants to be in the Council of Economic Advisers and work with President Bush,” Mankiw said. “It is too early to speculate on other jobs.”

Bernanke’s appointment is subject to Senate approval.