Janet Yellen is the first female chairwoman of the Federal Reserve and serves as the most influential economist in the United States. Yellen's historic path to the Fed was paved with hard work, excellent political connections and a belief in the ability of economists to help working families.
Early Life and Education
Janet Yellen was raised by her father, a doctor, and her mother, a teacher, in Brooklyn. Her friends and acquaintances describe her as soft, studious, intellectual and empathetic. Her path to the top of the Federal Reserve chain of command reads like a career academic's dream: lifelong love of learning, impeccable school record, undergraduate at Brown and PhD from Yale.
While studying at Pembroke College in Brown University, Yellen attended a lecture by noted Keynesian economist and Yale professor James Tobin. She came away impressed by his "strong sense of morality and social responsibility" and immediately decided to work on a path toward an economics career.
The technical science of Keynesian economics was never difficult for Yellen, who always excelled in school, and in math in particular. When she graduated from Fort Hamilton High, Yellen was the class valedictorian, editor of the school newspaper and winner of the math award, the science award and the English department achievement award.
Yellen even married a fellow economist, George A. Akerlof, whom she met at a lunch for the Governors of Federal Reserve System. Akerlof has been far from overshadowed by his wife; he shared the Nobel prize in economics in 2001 with Michael Spence and Joseph Stiglitz on the topic of asymmetric information.
Yellen's academic journey is not particularly uncommon among major macroeconomists. She attended the "right schools" and worked hard, mixed with the right people and happened to adhere to the economic philosophy of her era. After earning her PhD in 1971, Yellen was an associate professor at excellent economics departments, including Harvard and the London School of Economics. She earned plenty of collegiate academic honors during her time at university. Among her most prestigious awards were the Wilbur Cross Medal from Yale, an honorary doctor of human letters from Bard College and an honorary doctor of laws from Brown.
Between 1977 and 1978, Yellen worked with the Board of Governors at the Fed as an economist, left for various teaching positions and returned in 1997 as a member of the board. This included her first work in a quasi-political role, when she chaired the Economic Policy Committee of the Organization for Economic Cooperation and Development, or OECD. Her second stint at the Fed was not much longer that her first; Yellen accepted the chair position for the Council of Economic Advisors as a Democratic appointee in 1999.
Another big break came in 2004 when Yellen was made president and chief executive officer of the Federal Reserve Bank of San Francisco in 2004 and 2010. By this time, she was a sensation in the American economist discipline, and in 2010, was made vice-chair of the Federal Reserve. In 2014, President Obama tapped her to become the first female head of the Fed.
Net Worth & Current Influence
The Federal Reserve and its staff are required to make financial disclosures about personal incomes and net wealth. In 2012, Yellen reported investments of around $5 million to go along with another $13.2 million for her husband George Akerlof. Her financial success aside, Yellen remains an incredibly powerful political and economic voice in the U.S. and across the world thanks to her title.
Most Influential Quotes
"In the long run, outsourcing is another form of trade that benefits the U.S. economy by giving us cheaper ways to do things." -- Yellen on the impacts of American companies hiring foreign laborers.
"I'm just opposed to a pure inflation-only mandate in which the only thing a central bank cares about is inflation and not unemployment." -- Yellen on the role of the Fed.
"In government institutions, as in teaching, you need to inspire confidence. To achieve credibility, you have to very clearly explain what you are doing and why. The same principles apply to business." -- Yellen on her leadership philosophy.