Alan Greenspan’s eventual successor as chairman of the Federal Reserve may have to nudge the central bank toward greater openness to compensate for his biggest shortcoming: He won’t be Alan Greenspan.
The more than 60 central bankers and academic economists who gathered in Jackson Hole, Wyo., last weekend for a symposium on the Greenspan era praised him for steering the U.S. economy toward low inflation and low unemployment.
“The downside to his legacy is that he never really explained how do you do this,” Princeton University economist and former Fed vice chairman Alan Blinder, 59, said at the conference sponsored by the Kansas City Fed. His retirement “may in fact prove to be a traumatic experience for markets.”
President Bush hasn’t named a successor to the 79-year-old central banker, whose nonrenewable term as a governor ends in January.
Participants said whoever takes the helm may need to earn credibility quickly by giving greater guidance on the Fed’s price goals, strategy and forecasts.
“Greenspan’s successor has very big shoes to fill,” said N. Gregory Mankiw, a Harvard University professor and former chairman of the president’s Council of Economic Advisers.
