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HKS Authors

See citation below for complete author information.

Ford Foundation Professor of International Political Economy

Abstract

The race is on to fill the most important economic policy position in the world. United States Federal Reserve Chairman Ben Bernanke’s term ends in January, and President Barack Obama must decide before then: either re-appoint Bernanke or go with someone else — the names most often mentioned are Larry Summers and Janet Yellen — with more solid Democratic credentials. It is a decision of momentous consequence not just for the US, but also for the world economy. As guardians of the nation’s money supply and setters of short-term interest rates, central bankers have always played a critical role. Lower the interest rate too much, and inflation and monetary instability result. Raise it too much, and the economy slides into recession and unemployment. The world economy has been run for too long by finance enthusiasts. It is time that finance sceptics began to take over.

Citation

Rodrik, Dani. "Let Finance Sceptics Take Over." Business Standard and International Business Times, August 11, 2009 and August 21, 2009.