Transcript Alan Greenspan

Alan Greenspan
Background Information
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In 1987, President Ronald Reagan
nominated Greenspan as Fed chairman
Strong supporter of the free market and an
opponent of government intervention in
the economy
2nd longest serving federal chairman
Succeeded by Ben Bernanke
Blamed for Housing bubble and dot com
bubble
Influence of current events
• More recently, Greenspan's reputation has faltered
along with the world economy, and hindsightassisted evidence suggests that he turned a deaf
ear to warnings of the housing and stock market
bubbles that exploded after he left the Fed in 2006.
In House hearings during the second month of the
market meltdown of 2008, Greenspan testified that
he had "found a flaw" in his market ideology, and
conceded that he had been "partially" wrong in
opposing regulation of derivatives.
“Claim To Fame”
• Chairman of Federal Reserve before Ben
Bernanke
Quote
“Whatever you tax, you get less of.”
Graph
• Monetarists believe the Long Run
Aggregate Supply Curve is inelastic. If AD
rises faster than long run aggregate supply,
there may be a temporary rise in real output,
but, in the long run, output will return to the
previous level of Real GDP
Memory Aid
• “B.L.A.M.E.”
• Big Loss’ Alan, Monetary Economist
School of Economic thought
• Monetarist
• Believes national GDP grows as long as
money supply grows
• Greenspan biggest influence was Ayn Rand
• Rand = Founder of objectivism