Economics Professor Hails Yellen Pick as Fed Chief

Professor David Blanchflower called the confirmation of Janet L. Yellen as Fed chief, the first woman to lead the Federal Reserve in its 100-year history, "absolutely first rate."

Blanchflower, the Bruce V. Rauner Professor of Economics, has known Yellen for 20 years, when the then-Fed governor tapped the new Dartmouth professor to talk with the Fed Board of Governors about his published research, The Wage Curve.

"She's a fantastic economist, obviously super experienced as a central banker, and her forecasts were better than any other governor," he says. "This little gray-haired lady from Brooklyn is a powerhouse."

Her importance as the first woman to lead the Fed cannot be overstated, "but this is not affirmative action," he says. "She got it because she's the best."

Yellen, who replaces Fed Chair Ben Bernanke on February 1, served as vice chair of the Board of Governors. She is expected to follow Bernanke's course of gradual tapering of economic stimulus, including easing purchases of Treasury Notes.

"Continuity is obviously essential in this time of great economic uncertainty," says Blanchflower, a past member of the Monetary Policy Committee of the Bank of England.

"It's interesting that there are really no economists who have come out and said that they opposed her appointment, Republican and Democrat," Blanchflower says, "so I think it's extremely shocking that 26 GOP senators voted against the best pick, mostly for ideological reasons from people who know no economics."

The U.S. Senate approved Yellen by a vote of 56 to 26, with a number of Republicans supporting her, the narrowest confirmation margin in the history of the Federal Reserve.

"This is an absolutely fantastic appointment, someone with all the right credentials, and obviously people voted against her because she understands the economics and understood what to do, and that ran against ideology."