WHO IS Martin S. Feldstein
Martin S. Feldstein is an accomplished American economist, whose research focuses on macroeconomics, public finance and social insurance. Among the 10 most influential economists in the world according to Research Papers in Economics (RePEc) he is also ranked in the top 5% of economics authors according to criteria such as the number of published works (more than 300), number of citations and number of journal pages. He has also been on the board of directors of several corporations
BREAKING DOWN Martin S. Feldstein
Born in New York City in 1939, Martin Feldstein was educated at Harvard University and at Oxford University, getting his M.A. and his doctorate at the latter. He is George F. Baker Professor of Economics at Harvard – where for 20 years, he taught the introduction to economics class, the university's largest – the 1977 winner of the John Bates Clark Medal, the prestigious prize awarded by the American Economic Association.
Feldstein has held several public sector posts. From 1982 through 1984, he was Chairman of the Council of Economic Advisers and President Reagan's chief economic adviser. In 2006, President Bush appointed him to the President's Foreign Intelligence Advisory Board. In 2009, President Obama appointed him to the President's Economic Recovery Advisory Board. In 2005, he was considered one of the leading candidates to succeed Alan Greenspan as chairman of the Federal Reserve (Ben Bernanke ended up getting the post).
He has been a director of several public corporations, including Eli Lilly, J.P. Morgan, TRW and – most notoriously – American International Group (AIG). The fact that AIG's accounting scandal broke in 2005, and that Feldstein had oversight of the insurance division at the heart of it (though he was never connected to any malfeasance) may have affected his candidacy for head of The Fed. He resigned from the AIG board in 2009.
He is currently a consultant to the Department of Defense and serves on the board of directors of the Council on Foreign Relations, the Trilateral Commission, the Group of 30 and the National Committee on United States-China Relations.
A neoclassical economist, Feldstein has pioneered much of the research on the working mechanism and sustainability of public pension plans (he is an advocate of Social Security reforms, such as privatization of the system). One paper, published in 1974, focused on the effects of Social Security benefits upon household consumption and savings; its conclusion was that the payouts result in individuals deciding to save less for retirement and to retire earlier.
Another of his more well-known papers, published in 1980, was his investigation with Charles Horioka of investment behavior in various countries, and the global flow of capital. Examining 21 countries, he and Horioka found that in the long run, capital tends to stay in its home country – that is to say, a nation's savings is used to fund domestic investment opportunities, even if greater ones exist abroad. This has since become known as the "Feldstein–Horioka puzzle."