Alan Greenspan (b. 1926)
Who They Were
Alan Greenspan (b. 1926) is an American economist who served as Chair of the Federal Reserve from 1987 to 2006, one of the longest tenures in the institution's history. Taking over from Paul Volcker, he presided over a long economic expansion and became known for a style of cautious fine-tuning rather than the shock treatment of his predecessor. His chairmanship spanned the 1987 stock market crash, the 1990s technology boom, the dot-com bust, and the response to the September 11, 2001 attacks. Before the Fed he ran an economic consulting firm and chaired the Council of Economic Advisers under President Ford. Widely influential during his years in office, his low-interest-rate policies in the early 2000s were later scrutinised for their possible role in the housing bubble that preceded the 2008 crisis.
Key Contributions
Greenspan's tenure is remembered for a pragmatic, data-driven approach to setting interest rates and for several phrases that entered the economic lexicon.
- In a 1996 speech he warned of 'irrational exuberance' in asset markets, a phrase later linked to dot-com era stock speculation and used as the title of a well-known book published near the peak of the boom.
- In the mid-2000s he described as a 'conundrum' the failure of long-term yields to rise as the Fed raised short-term rates, prompting lasting debate about the term premium and global demand for safe assets.
- Following the dot-com bust and the 2001 attacks, the Fed under Greenspan generally lowered interest rates to support the economy.
His long stewardship of a period of low inflation and steady growth shaped a generation's expectations of central banking.
On EconRecall
Federal Reserve Chair from 1987 to 2006 known for cautious fine-tuning and for phrases like 'irrational exuberance' and the rate 'conundrum'. Play the games that feature Alan Greenspan: