Alan Greenspan was an American economist who served as the 13th chairman of the Federal Reserve from 1987 to 2006. He worked as a private adviser and provided consulting for firms through his company, Greenspan Associates LLC.
๐ Early Life and Education
Greenspan was born on March 6, 1926, in the Washington Heights neighborhood of New York City. His father, Herbert Greenspan, was of Romanian Jewish descent, and his mother, Rose Goldsmith, was of Hungarian Jewish descent.
After his parents divorced, Greenspan grew up with his mother in the household of his maternal grandparents who were born in Russia. He attended George Washington High School from 1940 until he graduated in June 1943.
He played clarinet and saxophone along with Stan Getz and studied clarinet at the Juilliard School from 1943 to 1944. He reported to a draft board for potential military service in World War II and was rejected as medically unfit in 1944 due to a spot on his lung.
In 1945, Greenspan attended New York University’s Stern School of Business, where he earned a B.A. degree in economics summa cum laude in 1948 and an M.A. degree in economics in 1950. In 1977, Greenspan obtained a Ph.D. in economics from New York University.
๐ผ Early Career and Consulting
From 1948 to 1953, Greenspan worked as an analyst at the National Industrial Conference Board. From 1955 to 1987, Greenspan was chairman and president of Townsend-Greenspan & Co., Inc., an economics consulting firm in New York City.
His 32-year stint there was interrupted only from 1974 to 1977, when he served as chairman of the Council of Economic Advisers, under President Gerald Ford. In mid-1968, Greenspan agreed to serve as Richard Nixon’s coordinator on domestic policy in the latter’s campaign for the Republican nomination for President of the United States.
Greenspan also served as a corporate director for several companies including Alcoa, Automatic Data Processing, and J.P. Morgan & Co. He was a director of the Council on Foreign Relations between 1982 and 1988 and served as a member of the Group of Thirty.
๐๏ธ Federal Reserve Chairmanship
On June 2, 1987, President Ronald Reagan nominated Greenspan as a successor to Paul Volcker as chairman of the Board of Governors of the Federal Reserve. The U.S. Senate confirmed him on August 11, 1987.
Two months after his confirmation, Greenspan said following the 1987 stock market crash that the Fed “affirmed today its readiness to serve as a source of liquidity to support the economic and financial system.” Democratic president Bill Clinton reappointed Greenspan and consulted him on economic matters.
Greenspan was fundamentally a monetarist and Austrian Economist in orientation on the economy. He also played a key role in organizing the U.S. bailout of Mexico during the 1994โ1995 Mexican peso crisis.
In 2000, Greenspan raised interest rates several times. In autumn 2001, in a decisive reaction to the September 11 attacks, the Federal Reserve initiated a series of interest cuts to the federal funds rate to 1% in 2004.
On May 18, 2004, Greenspan was nominated by President George W. Bush to serve for an unprecedented fifth term as chairman of the Federal Reserve. In September 2005, Greenspan indicated he planned to retire on January 31, 2006.
๐ Post-Fed Career and Writings
Immediately after leaving the Fed, Greenspan formed an economic consulting firm, Greenspan Associates LLC. On February 26, 2007, Greenspan forecast a possible recession in the United States before or in early 2008.
In May 2007, Greenspan was hired as a special consultant by Pacific Investment Management Company (PIMCO). In August 2007, Deutsche Bank announced that it would be retaining Greenspan as a senior advisor to its investment banking team and clients.
Greenspan wrote a memoir titled The Age of Turbulence, published in September 2007. Greenspan said that he wrote the book in longhand mostly while soaking in the bathtub.
| Category | Detail | Year | Key Event |
|---|---|---|---|
| Birth | New York City | 1926 | Born March 6 |
| Education | New York University | 1948 | B.A. in economics summa cum laude |
| Fed Chairmanship | Federal Reserve | 1987 | Nominated by President Reagan |
| Retirement | Federal Reserve | 2006 | Retired on January 31 |