Intellectually, Ben S. Bernanke was prepared to tackle the gravest economic crisis since the 1930s as chairman of the Federal Reserve. A Princeton University economics professor, he was an expert on the causes of the Great Depression. He was a practitioner as well as economic historian, serving on the Fed’s Board of Governors and as chairman of President George W. Bush’s Council of Economic Advisers. Yet in other ways, from dealings with reporters to bankers and members of Congress, there was little that could have prepared Bernanke for the challenges to come. Here are some highlights of his eight-year term, which ends tomorrow:
In 2013, a graduate student discovered a flaw in a spreadsheet, renewing the debate about austerity and debt. Emerging economies tanked, and Bitcoin boomed. In the U.S., unemployment fell and the Federal Reserve started to scale back its bond-buying program. Research focused on inequality and jobs gap between the highly skilled and everyone else. The Affordable Care Act began.
As a seven-year-old in Cuba, Carmen Reinhart memorized the routes of ships carrying silver from Peru and Bolivia to Spain. By 16, she had moved to Miami and got a job at a Sears Holdings Corp. store reviewing credit applications and payment records.
It takes eight years on average for economies to regain the level of income lost in a banking crisis, and the U.S. and Germany are alone among 12 in having already done so since the 2008 turmoil, according to Harvard University professors Carmen Reinhart and Kenneth Rogoff.
Carmen Reinhart, a Harvard University economist and co-author of a history of debt crises, said emerging markets are deteriorating as the U.S. recovers and may worsen as global interest rates begin to increase.
A restructuring of U.S. household debt, including debt forgiveness for low-income Americans, would be most effective in speeding economic growth, said Carmen Reinhart, a senior fellow at the Peterson Institute for International Economics in Washington.
Restructuring the debts of Americans, including debt forgiveness for low-income households, would be one of the most effective ways to speed up economic growth, said Carmen Reinhart, a senior fellow at the Peterson Institute for International Economics in Washington.
The world’s largest emerging markets recovered quickly from the 2008 financial crisis because consumers and companies went on a borrowing binge. Now that credit spree is coming back to haunt banks in those countries.