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Essay on Alan Greenspan's 3 Greatest Achievements
Alan Greenspan, Chairman, and Federal Reserve Board: How do we know when irrational exuberance has unduly escalated asset values which then become the subject of unexpected and prolonged contractions as they have in Japan over the past decade. And how do we factor that assessment into monetary policy? We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability. Indeed, the sharp stock market break of 1987 had few negative consequences for the economy. But we should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy.
Greenspan's comments about irrational exuberance and unduly escalating stock prices came after the New York stock exchange had closed, but traders around the world were just starting their day. In Japan's market, the first to open, traders interpreted the Federal Reserve Chairman's comments to mean that stocks in the U.S. market were overvalued and that, in response, the Federal Reserve might raise U.S. interest rates, thus affecting markets everywhere. Alan Greenspan took office June 19, 2004, for a fifth term as Chairman of the Board of Governors of the Federal Reserve System.
Dr. Greenspan also serves as Chairman of the Federal Open Market Committee, the System's principal monetary policymaking body. He originally took office as Chairman and to fill an unexpired term as a member of the Board on August 11, 1987. Dr. Greenspan was reappointed to the Board to a full 14-year term, which began February 1, 1992, and ends January 31, 2006. He has been designated Chairman by Presidents Reagan, Bush, Clinton, and Bush. Dr. Greenspan was born on March 6, 1926, in New York City. He received a B.S. in economics (summa cum laude) in 1948, an M.A. in economics in 1950, and a Ph.D. in economics in 1977, all from New York University.......
