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Alan Greenspan

Alan Greenspan

Who Is Alan Greenspan?

Alan Greenspan is an American economist who was the chair of the Board of Governors of the Federal Reserve (Fed), the United States' central bank, from 1987 until 2006. In that job, he additionally filled in as the chair of the Federal Open Market Committee (FOMC), which is the Fed's principal monetary policymaking committee that pursues choices on interest rates and dealing with the U.S. money supply.

Greenspan is best known for generally managing the Great Moderation, a period of relatively stable inflation and macroeconomic growth, that endured from the mid-1980s to the financial crisis in 2007.

Early Life and Education

Alan Greenspan was brought into the world in New York City on March 6, 1926. He received his single man's, lord's, and doctoral degrees in economics, all from New York University, as well as concentrating on economics at Columbia University in the mid 1950s under Arthur Burns, who might later serve two consecutive terms as chairman of the Board of Governors of the Fed.

Greenspan's most memorable job, in 1948, was not in government but rather for a non-profit breaking down demand for steel, aluminum, and copper. After this, Greenspan ran an economic consulting firm in New York City, Townsend-Greenspan and Co., Inc., from 1954 to 1974 and 1977 to 1987. Greenspan started his career in the public sector in 1974 when he filled in as chairman of the President's Council of Economic Advisers (CEA) under President Gerald Ford.

In 1987, Greenspan turned into the thirteenth chair of the Fed, supplanting Paul Volcker. President Ronald Reagan was quick to select Greenspan to the office, however three different presidents, George H.W. Bush, Bill Clinton, and George W. Bush, named him to four extra terms. His tenure as chair went on for over 18 years before he retired in 2006 to be supplanted by Ben Bernanke. Subsequent to leaving, he distributed his journal, The Age of Turbulence, and started his own Washington DC-based consulting firm, Greenspan Associates LLC.

Alan Greenspan was known as being capable at acquiring consensus among Fed board individuals on policy issues and for serving during one of the most serious economic emergencies of the late twentieth century, the aftermath of the stock market crash of 1987. After that crash, he pushed for strongly cutting interest rates to prevent the economy from sinking into a deep depression.

Fast Fact

Alan Greenspan was awarded the Presidential Medal of Freedom by George W. Bush, making him the main Fed chair to receive the award.

Alan Greenspan's Policies and Actions

Greenspan directed quite possibly of the most prosperous period in American history — thanks to a great extent, supporters feel, to his helming of the Fed. In any case, a portion of his policies and activities were controversial, either at that point or everything considered.

Sees on Inflation

Right off the bat in his career, Greenspan developed a reputation for being hawkish on inflation, in part due to his advocacy for a return to the gold standard in monetary policy in the 1967 exposition "Gold and Economic Freedom."

His purportedly "hawkish" position was depicted by early pundits as a preference for forfeiting economic growth in exchange for preventing inflation. Greenspan eventually switched those sees as Fed boss; in a 1998 discourse, he conceded that the new economy probably won't be as vulnerable to inflation as he had first suspected.

In practice, Greenspan's apparently hawkish approach was flexible, no doubt. He was plainly able to risk inflation under conditions that could make a serious depression and unquestionably sought after a generally [easy money](/pain free income) policy relative to his ancestor, Paul Volcker. In particular, in the mid 2000s, Greenspan directed cutting interest rates to levels not seen in numerous many years.

Flip-Flop on Interest Rates

In 2000, Greenspan supported diminishing interest rates after the dot-com bubble burst. He did so again in 2001 after 9-11, the World Trade Center attack. Following 9-11, Greenspan drove the FOMC to immediately reduce the Fed funds rate from 3.5% to 3%, and, before long, he pursued lowering that rate to a record (at that point) low of 1.13% and holding it there for a full year.

Some reprimanded those rate cuts as having the capacity to inflate asset price bubbles in the U.S. Greenspan's favorable to inflationary policies, particularly during this period, are today generally comprehended to have contributed to the U.S. housing bubble, subsequent [subprime mortgage financial crisis](/subprime-complete implosion), and the Great Recession, however this is of course disputed by Greenspan and his partners.

Encouraging Adjustable-Rate Mortgages

In a 2004 discourse, Greenspan suggested more homeowners ought to consider taking out adjustable-rate mortgages (ARMs) where the interest rate changes itself to winning market interest rates. Under Greenspan's tenure, interest rates subsequently increased as inflation accelerated. This increase reset a considerable lot of those mortgages to a lot higher payments, making even more distress for some homeowners and worsening the impact of that crisis.

The "Greenspan Put"

The "Greenspan put" was a monetary policy strategy famous during the 1990s and 2000s under Greenspan. All through his rule, he endeavored to assist with supporting the U.S. economy by actively utilizing the federal funds rate to forcefully lower interest rates to fight the deflation of asset price bubbles.

The Greenspan put made a substantial moral hazard in financial markets. Informed investors could anticipate that the Fed should make unsurprising moves that would bailout financial backer's losses, which distort the incentives of market participants. This established an environment where investors were encouraged to face unreasonable challenge since Fed monetary policy tended to intrinsically limit their possible losses in the event of a market downturn in a closely resembling approach to buying put options on the open market.

The Bottom Line

In the same way as other government authorities, the progress of Alan Greenspan's five terms as Chairman of the Fed will rely upon who you ask. In any case, it is positively a fact that Greenspan confronted a few enormous difficulties during his tenure, for example, the 1987 stock market crash and the attacks on the World Trade Center.

Overall, Greenspan helped introduce a strong U.S. economy during the 1990s. Assessment on how much his activities caused the economic recession that started soon after his term ended shifts.


  • Greenspan's policy was defined by the Great Moderation, or the long-term maintenance of low, stable inflation and economic growth.
  • Greenspan is considered by some to be hawkish in his concerns over inflation. He received analysis for zeroing in additional on controlling prices than on achieving full employment.
  • Alan Greenspan is an American economist and former chair of the Federal Reserve.
  • The expansionary monetary policy of "income sans work" credited to Greenspan's tenure has been faulted in part for stirring up the 2000 website bubble and the 2008 financial crisis.
  • Greenspan's experience as chair started with the immediate test of dealing with the historic 1987 stock market crash.


How Old Is Alan Greenspan?

Alan Greenspan was brought into the world on March 6, 1926, making him 95 years of age as of June 2021.

Who Replaced Alan Greenspan?

Ben Bernanke supplanted Alan Greenspan as Chairman of the Fed when he was delegated in 2006. Bernanke served until 2014.

Who Is Alan Greenspan's Wife?

Alan Greenspan married writer Andrea Mitchell in 1997.

How Long Was Alan Greenspan Federal Reserve Chair?

Alan Greenspan filled in as Chairman of the Fed from 1987 to 2006, for a total of five terms.

Who Appointed Alan Greenspan?

President Ronald Reagan selected Alan Greenspan as Chairman of the Fed in 1987.

What Is Alan Greenspan Doing Now?

After his time at the Fed, Greenspan has filled in as an advisor through his company, Greenspan Associates LLC.