Washington - Janet Yellen found love at the Federal Reserve. She met him at a luncheon in 1977, launching a whirlwind romance that led to marriage in less than a year.
In connecting with George Akerlof, then on a temporary assignment at the Fed’s research division in Washington, Yellen discovered not just a soul mate but an intellectual equal with similar views about the societal impact of economic policy.
Together, they formed one of the pre-eminent power couples of modern economics. They collaborated on ambitious research while holding increasingly demanding jobs and raising a son who grew up to share their academic passion.
Yellen, who is currently the second most powerful official at the Fed, is expected to win nomination from US President Barack Obama to become its first chairwoman, replacing retiring Ben Bernanke. If approved by the Senate, her appointment would crack one of the highest US glass ceilings and make her the first woman to head the central bank in its 100-year history.
But the influence of her husband in shaping her thinking and professional success cannot be overestimated, say those who have known the couple for decades.
The support went both ways. Yellen helped Akerlof maintain the focus that distinguished his academic work, highlighted in 2001 when he shared a Nobel Prize in economics. He later wrote in an autobiography for The Nobel Foundation about happily collaborating with his wife for more than a decade.
“Not only did our personalities mesh perfectly, but we have also always been in all but perfect agreement about macroeconomics. Our lone disagreement is that she is a bit more supportive of free trade than I,” he wrote.
Yellen came to the Fed in 1977 from Harvard University after a recruiting effort that involved Ted Truman, then about to take over the Fed’s international finance division.
The recruiters faced an uphill battle because Yellen was teaching at Harvard University and her early research made her a sought-after talent. But she took the Fed job to work on projects in trade and financial studies. The Fed was under pressure in 1977 with rising inflation unsettling the economy. Truman assigned Yellen to research international monetary reform.
Truman said Yellen had barely settled into the Fed before announcing she would join Akerlof and lecture at the London School of Economics. “We were disappointed when she left with him, though completely understanding. We had invested a lot in attracting her.”
Yellen returned to the Fed in 1994 with her appointment to the central bank’s board, and Akerlof commuted between Washington and Berkeley, continuing to teach. When Yellen moved to former president Bill Clinton’s Council of Economic Advisers, Akerlof took leave.
He tended the household and helped raise their son, but his main support for Yellen while she was at the White House was “providing psychological support in the daily political storms”, he wrote. She was named head of the Federal Reserve Bank of San Francisco in 2004 and nominated to be vice-chair of the Fed in 2010.
Now, as Yellen anticipates yet another promotion, their friends say she is bound to make the Fed a stronger organisation. – Reuters