ERIC Number: EJ1043174
Record Type: Journal
Publication Date: 2014
Reference Count: N/A
Undoing Quantitative Easing: Janet Yellen's Tiger Ride
Niederjohn, M. Scott; Schug, Mark C.; Wood, William C.
Social Education, v78 n2 p73-76 Mar-Apr 2014
"One who rides a tiger is afraid to dismount," says a colorful proverb from an earlier time. This may be an apt saying for the situation facing the new head of the Federal Reserve, Janet L. Yellen, who takes over at a time when successive rounds of Fed policy have taken the central bank into uncharted territory. By historical standards, Fed policy has been quite aggressive. Now that the time has arrived to unwind that policy, the withdrawal effects may be serious. Called "quantitative easing," the Fed's policy has involved huge injections into the banking system through repeated massive purchases of securities. Janet Yellen--the first woman to assume the post of chair of the Federal Reserve's Board of Governors--succeeds Ben S. Bernanke, who served as chair from 2006 to 2013. What is her macroeconomic economic philosophy? In her outlook, Yellen is generally Keynesian (a school of economic thought favoring government intervention to stabilize the economy, originally inspired by the British economist John Maynard Keynes). In her new role, her primary task is to put monetary policy on a more normal footing without endangering economic recovery. In this article, the author considers ways in which she might approach this task given the challenges involved.
Descriptors: Macroeconomics, Economic Change, Economic Development, Economic Impact, Economics Education, Public Policy, Federal Regulation, Change Agents, Change Strategies, Government Role, Governing Boards, Public Officials
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Publication Type: Journal Articles; Reports - Evaluative
Education Level: N/A
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