On Monday, January 6th, 2014, the U.S. Senate confirmed professor emeritus at Haas, Janet Yellen, to succeed Ben Bernanke as Federal Reserve chairman. Ms. Yellen will be the first female Federal chief to lead the central bank in its 100 year history and the first democrat in this position since 1987. Under Ms. Yellen’s expertise, the US economy is expected to strengthen with more employment opportunities.
I decided to write about Janet Yellen because she inspires me to strive for top leadership positions despite prevailing gender barriers in the corporate world. Ms. Yellen is a testimony to the competence of women in holding esteemed positions and tackling global issues.
History at Berkeley
From 1980-2004, Ms. Yellen taught at UC Berkeley’s Haas undergraduate, full-time MBA, and Evening & Weekend MBA programs. She taught the requisite Macroeconomics and Introduction to International Business to undergraduates and MBA students. Ms. Yellen was awarded the Earl F. Cheit Award for Excellence in Teaching in 1985 in the full-time MBA program and in 1988 for the Evening and Weekend MBA program. In the fall of 2012, Yellen was honored as Haas Business School’s 2012 Business Leader of the Year.
As Federal Chair, Ms. Yellen must decide when and how to wean the financial system off easy-money policies and pull back on quantitative easing; the act of buying long term bonds instead of treasury bills to lower long-term interest rates and induce business investment and consumer spending. Although quantitative easing has prevented the economy from declining, it has failed to revive it.
Ms. Yellen argues that when the Federal Reserve (Fed) identifies signs that the economy will have growth strong enough to sustain continued progress, then the Fed can stop relying on the bond-buying program. Ms. Yellen claims that, “I believe that supporting the recovery today is the most prudent path to a more normal approach to monetary policy.”
She also states that the Fed will keep short-term interest rates near zero after the bond program ends to not remove the bandage of support too fast.
Along with Bernanke, Ms. Yellen has made increased credibility a top priority. She is developing policies to make the Federal Reserve a more open and transparent institution. With increased transparency, Ms. Yellen ensures the Fed will use its regulatory powers to prevent systematic failures and reduce the threat of another financial crisis.
Ms. Yellen’s appointment as Federal Chair is a new landmark for women’s rights and gender equity. Janet Yellen broke the glass ceiling by being the first woman to be considered and nominated to lead the Federal Reserve. With Janet Yellen as Chairman of the Fed, Angela Merkel as Chancellor of Germany, and Christine Lagarde as the Managing Director of the International Monetary Fund, women now hold three of the most powerful positions that impact the global economy.
Ms. Yellen is an inspiration to all women, especially our female Haas business students who are aspiring for what have traditionally been male dominated careers.
Disclaimer: Information from recent WSJ articles and Bloomberg Businessweek.