Bordo, Levy See Warsh as "Mainstream Central Banker" in Greenspan-Bernanke Tradition

Hoover economists see former Fed Board governor continuing his historic voting record as an inflation hawk, and advocating for smaller Fed balance sheet

Michael Bordo and Mickey Levy have known and worked alongside Kevin Warsh for several years through their mutual affiliation with Stanford’s Hoover Institution. Mickey’s work as a Wall Street economist and Michael’s as a Rutgers Univeristy professor and eminent economics historian have also connected them with Warsh over the years

This is why I asked them to weigh in on what kind policy maker Warsh was during the years from 2006 to 2011 when he was on the Fed’s policy making Board of Governors, the work he has done since then both at Stanford’s Hoover Istitution and Graduate School of Business, the speeches he has given and op-eds he has written, and what this tells us about what kind of Fed Chair he will be.

”I believe he would be a mainstream central banker, like all of the central bankers of the advanced countries,” Michael says. “He would believe, most importantly, in the importance of, price stability or the value of money.”

”And he would also believe in the dual mandate and the importance of maintaining full employment. I would put him in the sort of Greenspan Bernanke tradition…and holding everything equal, just knowing about his history, he would probably be a hawk and a rules guy,”

They both described Warsh as a conservative and pragmatic leader who is likely to adopt a rules-based approach to monetary policy, drawing inspiration from figures like George Shultz, Milton Friedman, and John Taylor. He is expected to prioritize inflation control, aiming to bring it back to the 2% target, while remaining data-dependent and practical in his decision-making.

”Knowing him quite well… he's basically a conservative…an old fashioned conservative,” Mickey says. “And so we think in terms of the dual mandate, he would tilt toward emphasizing employment and he would basically say the Fed's greatest contribution to achieving a dual mandate would be stable, low prices.”

”I don't expect that he will abide by rules, but - and unlike his predecessors - he will be more aware of what the rules are saying and how that should be guiding the Fed.”

”Mike and I would agree, he would fit in very well in the Shadow Open Market Committee,” Mickey adds referring to the organizatio where he and Michael are both long-term members, an independent group of mostly academics that has taken up the task of ‘shadowing’ various Federal Reserve actions and decisions.

Warsh has been critical of the Federal Reserve’s handling of post-pandemic inflation, particularly its prolonged low-interest rates and reliance on the “transitory inflation” narrative. But when it comes to getting inflation back down to its 2% skeptics are betting that the Fed-chair elect will quickly buckle to pressure from President Trump and cut rates no matter where inflation may be.

Mickey says Warsh will be data dependent.”But instead of prioritizing employment and other potential factors, he will tilt toward wanting to get inflation to 2%.”

A much more contentious debate may be Warsh’s push to reduce the Fed’s balance sheet, favoring a smaller, bills-only approach to monetary policy, a change he has been advocating “for a long time and I suspect that’s a button he’s going to push,” Michael says.

”The reason the balance sheet was expanded was because of the global financial crisis… a way to expand monetary aggregates and do things in a way that would that would prevent the economy from staying.. in a serious recession,” he adds. “So the reason they did it way back in 2008 to 2009…that’s not the debate. The debate is what they did ever since.”

”Both Mike and I believe that Kevin will initiate this debate and that will lead to a serious debate within the Fed, “ Mickey says. And, if they do it with credibility, markets will be just fine with it.”

So sit back, dive in, and hear about all this and more. Why they expect Warsh to stand up for Fed independence even after the world has been aghast at the President’s push to fire a Fed Board governor, and his threat to fire the Chairman. How and why they expect Warsh to work well with Treasury Secretary Scott Bessent and bolster more communication and coordination on monetary and fiscal policy.

In the end it’s clear from Michael and Mickey there’s a tug-of-war between those who see the nominee as doing the president’s bidding and those who see Warsh as having a track record of being much more of a hawk and an advocate of low and stable inflation.

Warsh in the Greenspan-Bernanke Tradition 00:02:03:13 - Bordo

Yeah. I would say he would be, a mainstream central banker, like all of the central bankers of the advanced countries. He would believe, most importantly, in the importance of, price stability or the value of money. And he would also believe in the dual mandate and the importance of maintaining full employment. I would put him in the sort of Greenspan Bernanke tradition.

Warsh is a rules based Hawk 00:02:37:18 -Bordo

He would be a lot like they would and, probably if he, you know, holding everything equal, just knowing about his history, he would probably be a hawk and a rules guy. Okay. And I’ve, I’ve, I’ve done research on not only on who are the hawks and doves in the Fed for the past 50 years, but I’ve also worked on who would be believers in rules and who would be believers more in discretion. I would put, Warsh in with the hawk rules based, sort of tradition. Okay. But of course, that’s with I other thing I said, other things equal.

A dual mandate guy 00:03:30:05 - Levy

I would just completely agree with Mike if I had to characterize Kevin. Knowing him quite well is he’s basically a conservative or an old fashioned conservative. And so we think in terms of the dual mandate, he would tilt toward emphasizing employment and he would basically say the Fed’s greatest contribution to achieving a dual mandate would be stable, low prices.

…and a potential fit for the SOMC! 00:04:00:07 - Levy

And, you know, that’s Mike didn’t mention that he would tilt toward more rules, like base conduct of monetary policy. I fully agree. I don’t expect that he will abide by rules, but - and unlike his predecessors - he will be more aware of what the rules are saying and how that should be guiding the Fed. So, I put a positive on, on all these issues, and Mike and I would agree, he would fit in very well in the shadow open market Committee.

00:05:20:08 - 00:05:44:22

Bordo

I mean, I think I mean, I think one thing he would do is he would go along with the, the, the latest, you know, fed, fed mandate, at least fed, fed statement that came out last, last June, which is a symmetric approach to, to, to the mandate. Okay. I think he would, he would, he would agree with that.

A fundamentalist 00:05:44:24 - Bordo

And, you know, it would depend on the circumstances that would face him at the meetings that he, that he, that he deliberates over when, when he becomes, the chair. And I think he’ll play it pretty straight. Okay? He’ll just look at the fundamentals and he’ll play it pretty straight. And if the fundamentals, you know, dictate that he should be cutting rates, he will.

The Belichick School? Do your job! 00:06:11:17 - Bordo

But if they don’t, I think he’ll have a hard time justifying not doing it. And that that’s which I, I think is, you know, something that people may not agree with me on that they may think he’ll cut rates no matter what, but I suspect he has a deep understanding of what central banks are supposed to do, and he will do his job.

More rules-based 00:07:48:11 - Levy

Look, I look, we both Mike and I agree that the Fed will be more rules based. And he and Warsh will be and make the Fed aware of what kind of ballpark estimate the Taylor rule suggests the funds rate should be. But I think the more important point is the Fed has this dual mandate.

Warsh left before inflation targeting took hold 00:08:15:13 - Levy

You know, price stability, which it defines as 2% inflation in the, in the PC inflation and maximum employment, which in its official statement, the fed agrees that monetary policy is incapable of of managing what maximum inflation is, that you can’t put a numeric target on it. Now, Kevin left the Fed as governor before the 2012 consensus statement, where the Fed established 2% as the inflation target and maximum employment, and took a symmetric view.

Kevin is untested in this dual mandate with a target regime 00:08:55:07 - Levy

Fast forward to 2020 and the fed, which was excessively worried about inflation being too low. And the zero lower bound or the effective lower bound and rates shifted and in 2020 took an asymmetric view which prioritized employment and allowed inflation higher. And then, as Mike mentioned, last summer, they shifted back in their strategic review and agreed to move to a symmetric interpretation. Kevin will take a literal interpretation of that symmetry. And yes, over the last five years, my inflation has been above the Fed’s target. But we note that last year the Fed eased rates even though, inflation was above the Fed’s target. Let’s just put it this way to be very interesting to see how, Kevin responds and leads the Fed in those types of situations.

Both mandates equal, but inflation may be more equal 00:09:58:12 - Levy

Mike and I agree that he’ll be a symmetrical and will tilt toward wanting to get inflation back to 2% here, but he’ll also be practical. And, a lot depends on the economic data and what happens, to employment. So what you’re saying is he’s going to be he’s going to be data dependent, as the Fed has been. But instead of prioritizing employment and other potential factors, he will he will he will tilt toward wanting to get inflation to 2%.

Warsh would likely give Powell a grade of ‘C’ 00:11:34:23 - Bordo

Well, I mean, he’s already said it. I’ve heard a speech he gave in Hoover. You know, when I was there a couple of months ago and, I listened to his IMF speech, he would give Powell a ‘C’ because be he was critical of how the Fed handled the post pandemic inflation. Okay. He would agree with what Mickey and I said, which is that, you know, that the Fed kept rates too-low for too-long that they, they accommodated the fiscal expansion and they took the, the view that when there was inflation, that it was primarily what they called team transitory, driven by supply shocks. Okay. So he was critical. He was critical of that of what the Fed did. And so I suspect going forward that he would try not to do that. Okay. So it’s already in the record that he would he would I think he would have given him a ‘C’ okay. Maybe a c-plus. Okay. And getting back to the future, based on his, his, his revealed speeches over the years.

Warsh: very conventional orthodox 00:12:52:01 - Bordo

Okay. What he did when he was at the fed, what he did at Stanford. I sat in on his classes. Okay? We had him many times do our Hoover monetary policy conference in May, and he often was part of that. Okay. And, you know, just from all the things he said over the last, you know, I’ve been associated with with Hoover for about 15 years, okay. Is that he would he would, you know, other things equal, he would be following very sensible, you know, central bank, middle of the road orthodox central bank approach. And he would try to make sure that prices were stable. That’s it. Okay. He would try but he would see he his view is that that the fed made a mistake. He’s he’s been critical that they haven’t even reversed it enough and they haven’t recognized it. So the points that Mickey and I made a lot and other shadow people he made in the speeches he’s given in the last few years. Okay. So, I mean, I’m going to go on what he said now, sure. You could talk about in the current political environment.

Who does he revere? Schultz, Freidman, Taylor 00:14:02:13 - Bordo

Okay. And what he said very recently, maybe to help get himself that job. Okay. But I’m thinking about this guy as somebody who his background, you know, the people he reveres, he whenever he gives a speech, who does he talk about? George Shultz. Okay. He gives speeches about George Shultz, the importance of being consistent, having a plan, all that. Who else is you cite Milton Friedman. Okay. Important. Some of the the stability of money. Who else is inside John Taylor in the Taylor rule. So these are the people that are his mentors. And so I, I’m basing my opinion on on where he’s coming from.

A realist; a pragmatist 00:14:48:18 - Levy

Say yes to everything Mike has said? But Kevin is also a realist and a pragmatist. And so he keep in mind he was he was a governor, during the great financial crisis. And, you know, they did move rates to zero. And he approved and they started out with, you know, QE one, which was, you know, purchases of members.

Challenge the orthodoxy! 00:15:19:08 -Levy

And he approved. He then started to back off and he quit. He thought the Fed remained too easy too long. I think one area where Kevin will be very practical-minded is I think he will be very good about challenging the Fed and the Fed staff on their methodologies and their assessments of the economy. And this is very, very important. And this is where I think he would give, you know, poor grades to, to the Fed in, you know, 2020 through, you know, 2021 that I think Kevin would have if he were there, he would have asked, you know, tough practical questions. And I think in that regard, he will add very, you know, keep in mind he’s just the chair. There are, you know, six other governors and all of the all the Federal Reserve Bank presidents. But I think Kevin will add very nicely with his historic knowledge and his being practical minded in, in, in, in assessing, you know, the economy and the proper role of the fed.

The counterfactual is hard to embrace 00:17:18:14 - Bordo

You know, what you’re doing is you’re asking a question about what this guy would have done were he there versus what he says he would have done now given the politics. So what he would have done when he was there and what he said at the time was he would have been critical of the fed. He would have wanted the fed to tighten much sooner than they did. Okay. And he would have also been on the side of not supply side but demand side. That, in a sense, is excess demand that created the inflation and not these temporary supply shocks. Okay. That’s what he would have said. And I suspect he still would say that in terms of going back and, and evaluating the record of what happened.

A bridge to Wall Street 00:18:05:01 - Levy

Kathleen, one of the key roles that Kevin played as a governor, during the financial crisis and during his whole, term as governor, he was in very close contact to Wall Street and financial institutions and, business executives in the private sector. He kept his ear to the ground, and he would report in detail to, to the FOMC about his findings.

Likely to have sniffed out the fallacy of transitory inflation 00:18:37:17 -

And fast forward to 2021, I think he would have had he been at the Fed, I think he would have taken that knowledge that he had learned from the private sector about that, that, product demand, aggregate demand in the economy was exploding to the upside, and he would have poked a lot of holes in, you know, the, the, the temporary or transitory supply shock argument.

Still four month’s until he takes over 00:19:09:13 -Levy

But now, I mean, if you take if you take those characteristics of Warsh and, and fast forward, you know, there’s, there’s four months, left in, in Powells term as chair. And we’re going to get four more months of data on employment and inflation and the economy in general. And, you know, the Fed is going to be deliberating in anticipation of, of Kevin coming in. And, once again, I think he’ll be practical minded and, let’s let’s see what happens.

Warsh will do a good job 00:21:26:13 – Bordo

Okay, I, I think he will he will do a good job. He will try to maintain that independence, and he will deal with the situation as it comes along. So getting to your point about, you know, Mickey’s view and Waller’s view of where the economy’s going. So, if they’re right, okay, then, you know, and if the data keeps, going that way in the in the what once what once. Warsh is in, in the saddle. Okay. He would cut rates if he thought the fundamentals were going there and sure the President would say this is great okay. But if it’s not the case, if the fundamentals don’t line up, okay. And all the things the fFd looks at the neutral rate, all that stuff, okay.

Warsh will not buck the Committee 00:22:16:16 - Bordo

And if the majority of the committee doesn’t think it’s a time to cut. Okay. I really don’t think he’s going to overpower them. I cannot see him being like Arthur Burns. Barbara Burgess ran the show. Okay. But if you look at all the other… all the other chairs - except for Burns - they did go with consensus. Okay. And if the consensus says no, this is not a good thing, I would say the chair would go along with it. I mean, look, I, I think he, he I, I think he will go along with that view and he will, try to cut back on non fundamental monetary policy issues. But I mean by that is the mandate period okay. And lender of last resort. And I think he will be reluctant to move in the directions of, of climate and all the other stuff that the Fed has moved. It has got itself going. It has got itself into I would say he will be opposed to that.

Knows about governance 00:23:59:19 - Levy

Do you think? Yeah. Okay. So, if we think of, of governance, the first thing to think about is Warsh comes in as a known quantity and will have the respect within the Federal Reserve System. And that’s a big, big, big plus, right. And there has been discussion about reforming the governance of the Fed. And I would say and particularly let I, let me mention, governor, Steve Marin, who, who was recently nominated by, by Trump. And he has actually come out with a blueprint for pretty radical reform of the Fed. Kevin is a veteran of these types of issues. After he left the Fed, he conducted, a major review of the Bank of England and, reviewed its governance and wrote a significant report on it.

Will stand up for Fed Independence 00:25:07:17 - Levy

And so he understands the proper role of the central bank and how they operate. And so I think he will be somewhat open to reform. But not silly radical reform, and will work very collegiately within the Fed to achieve efficient reforms, but not do anything crazy. And to your Kathleen, to your prior question, Warsh will stand up for the independence of the Fed.

The economy could test him early 00:25:44:20 - Levy

Completely. He fully recognizes the importance of, the Fed deliberating on monetary policy independently of, of political pressure. And, you know, he’s going to face some tough times, particularly if, you know, if we do in the next, you know, handful of months, get a sharp, you know, you know, continued stagnation in employment. And that starts to affect consumption, even with inflation above 2%.

He should work well with Scott Bessent 00:26:16:17 - Levy

That’s, that’s going to, you know, then then he’s going to have a tough time out of the starting blocks. But I have confidence that he will, he will use good judgment, convey the Fed very well in policymaking circles. And and one issue, Kathleen you you had with it hasn’t come up yet today and that is Secretary, you know, of, of the Treasury, Scott Bessent and here I think, here I think Kevin will get along very well with him, which is, which is very, very important.

A small Fed Balance sheet 00:26:56:11 - Bordo

Know, one other topic that we haven’t touched yet is, and Kevin said this quite a bit over the years is he would reduce the Fed’s balance sheet. Okay. He would he would like to see the Fed go towards, you know, a small balance sheet bills only the his views would be that different from Charlie Plosser. You know our former SOMC person and Fed president okay. And I think that that is that that’s an approach that most mainstream economists don’t like. Probably a lot of the staff doesn’t like, but I suspect he’s going to push that button. Okay. And that’s going to be a very important thing. I mean, we think that would be a good thing to do, but I suspect that is a change that’s going to come.

Fed and Treasury can cooperate 00:28:23:22 - Levy

There are good examples, of the, you know, Fed chair, Greenspan in the 1990s, communicating very well with Secretary of Treasury Robert Rubin. There are many examples in the past. And, you know, we want those types of communications, without and that certainly would not inhibit the conduct of the independence of the Fed.

Bessent and Warsh highly compatible 00:28:51:24 - Levy

We just don’t want, President Trump feeling like he can dictate to the Fed where interest rates should be. And here I think it’s just important to say that Kevin will work very well with the Secretary Treasury, because they both keep their ears to the ground and they understand market responses and how to interpret them.

Warsh likely able to handle A Fed- Treasury relationship 00:29:51:09 - Bordo

No, I think I think that Kevin Warsh knows the history pretty well. Okay. And I think he would be careful not to repeat the kinds of situations that did occur in the past with Nixon and Burns and McChesney, Martin and LBJ, those kinds of things. I think he knows about them, and he’s not going to let that happen. Okay. But being able to communicate well with the Secretary of the Treasury, that’s a very good thing. They always have meetings. Anyway. I mean, they have these meetings every couple of weeks, I think. I don’t know for sure. Okay. And they talk about lots of issues and you need to have coordination on a lot of stuff between the Treasury and the fed. That’s just because there’s a connection between monetary and fiscal policy and management. So he’d be very good on that okay. So I, I see heels I see him as sticking to the rules on this.

Staff will not be behind a push to shrink the balance sheet 00:31:31:12 - Bordo

I mean, look, Warsh has been critical of the balance sheet for a long time, and I suspect that’s a button he’s going to push. Okay. Quite he’s going to push it and he’s going to have to take a position on this. And he’s going to have to deal with the fact that most of the staff, okay. And much of mainstream. Fed, and mainstream economists think that using a large balance sheet is a better way to conduct monetary policy than the small balance sheet bills only approach that existed, both before the GFC. Okay, so this I think this is going to be a debate and it’s going to get worked out. I don’t know how it’s all going to play out. I don’t think there’s going to be an instant transformation. Okay. But I think he he I think that’s his view. And also one reason why he has that view is the view that we’ve talked about before is that it’s increased the set the size of the Fed’s mandate, okay. Because once you have this large balance sheet, you can use it for lots of things other than monetary policy.

Expect a fight over the balance sheet 00:32:40:15 - Bordo

The reason the balance sheet was expanded was because of the global financial crisis. Okay. And it was a form of trying to expand, you know, expand monetary aggregates and do things in a way that would that would prevent the economy from staying in the sea in a serious recession. We were okay. So the reason they did it way back in 2008-09, okay, that’s not the debate. The debate is what they did ever since. And the Fed has continuously used this. And there’s always been an argument about it. Okay. The economic profession is shifting and they’re actually justifying it. And I think that that Kevin’s going to want to get into that question. And he’ll have people study it. Okay. And I think this is going to be a big change.

Large Balance sheet= Mission creep 00:33:59:05 - Levy

Okay. So let’s think of let’s put it in a context as Mike correctly said, the Fed engaged in and also large scale asset purchases during the financial crisis. That was fine and good to start because it did it did stabilize markets and then and then they did QE, QE three. But what the what Kevin’s really going to emphasize here is how the Fed has expanded its balance sheet to expand the role of monetary policy, what Kevin would call mission creep.

And why did the Fed ever Buy MBS? 00:34:39:17 -Levy

And, and at the same time the, the so if you consider, during the Covid pandemic, one can ask the question, well, I can understand why the fed may have bought over a trillion treasuries in March April 2020 to stabilize the Treasury. Marcum. But why in the world did they ever get involved in purchasing, mortgage backed securities?

What should- can- the Fed do to promote stability? 00:35:09:13 -Levy

Then when the housing market was was doing well and then it took off. And, and, you know, the fed staff, have been focusing on the short term funding market and they don’t like volatility. And there was a period of volatility in, in, September 2019, the, the they attribute to the balance sheet, having gotten low enough. And so there’s this issue of the size of the balance sheet, and maintaining stability in short term funding markets. And the issue is what do you mean by stability and how much volatility is okay and how much is unaccepted. These are going to be under debate. But to the point of financial markets. There’s a lot on, on the table.

The balance sheet shrinkage goal will prompt a lot of discussion 00:36:08:16 - Levy

There’s shrinking the size of the balance sheet. How you would do it, what assets you, you go about, allowing to roll off the, the Fed’s portfolio and then at the same time, what do you do with interest rates at the same time? And, I both Mike and I believe that that, and Kevin will initiate this debate and that will lead to a serious debate within the fFd. And, if they do it with credibility, markets will be just fine with it.

Be aware of history 00:37:10:10 - Bordo

Well, what I’ll say is what you would expect me to say. Which, that he should be very cautious. He should be aware of history, and he should be aware of what’s gone before. What the Fed has done in the past, what other central banks have done. Okay. And he should also be aware of what economists think about these things too.

Talk to people 00:37:32:22 - Bordo

And he should be he should also be, talking to people. He should be communicating with people and trying ideas out. Okay. One idea Mickey and I have is there should be like an informal, external counsel that gives them ideas. Okay. Something that would keep him sort of plugged in, okay. Because one of the problems that we the shadow of always talked about, you’ve asked us about this in the past is the fact that the Fed tends to be a closed shop. Tends to be, you know, inside the Beltway and there is there is a Fed view in Washington. And that’s very hard for them to think outside that box. Okay. And every chairman who comes along okay, no matter how distinguished he is, somehow or other drinks the Kool-Aid. Okay. And whatever they whatever they say before they get there, after a while, they start to talk.

Don’t be coopted by Fed-Speak 00:38:34:14 - Bordo

Just like the Fed is Fed Speak. Okay, so this is something that, you know, he you could we could tell him that now and he’ll say, don’t worry, I’m on my own person. But it’s something you have to be careful about.

Fed must honor its dual mandate and achieve its inflation target 00:38:51:21 - Levy

Yet first, I like my suggestion. My suggestion that would parallel that is, Kevin really needs to take to heart the Fed’s dual mandate and the Fed’s proper role in achieving it. And by this I mean the following. 2% inflation is the Fed’s target. It should really achieve it. It shouldn’t just say, oh yeah, 3% is close enough. Just listen to what the public has said about the persistent increase in the general price level. The Fed’s mandate of maximum employment, it has been stated in every one of the Fed’s long run strategic plans that a lot of what happens in labor markets is outside of the scope of what monetary policy can achieve. So right now, we’re in a situation where, some big noted companies are shedding some of the jobs they added right after the pandemic.

Do not fine tune! 00:40:10:10 -Levy

We all know that employment gains have slowed. What I urge Kevin to do is take to heart the notion that the Fed should not fine, try to fine tune the economy, and just let it be, because there’s a whole host of non-monetary factors that are driving this portion of the of the dual mandate. And that’s to, you know, that takes a lot of, experience.

Labor markets often are beyond the Fed’s control 00:40:48:00 - Levy

And the Fed has had this tendency historically to be too enthusiastic into too much into fine tuning. So when we hear current Fed Chair Powell say, oh, we’re, you know, we’re, very data dependent, you have to take the data dependance with a grain of salt, knowing full well once again that while the Fed can control inflation in the longer run, so much of what happens in labor markets is beyond its control.

Michael D. Bordo

Michael D. Bordo is the Duncan Stewart Distinguished Visiting Fellow at the Hoover Institution. Bordo is a Board of Governors Professor of Economics and director of the Center for Monetary and Financial History at Rutgers University, New Brunswick, New Jersey. He has held academic positions at the University of South Carolina and Carleton University in Ottawa, Canada. Bordo has been a visiting professor at the University of California at Los Angeles, Carnegie Mellon University, Princeton University, Harvard University, and Cambridge University, where he was the Pitt Professor of American History and Institutions. He is currently a distinguished visiting fellow at the Hoover Institution, Stanford University. He has been a visiting scholar at the International Monetary Fund; the Federal Reserve Banks of St. Louis, Cleveland, and Dallas; the Federal Reserve Board of Governors; the Bank of Canada; the Bank of England; and the Bank for International Settlement. He is a research associate of the National Bureau of Economic Research, Cambridge, Massachusetts, and a member of the Shadow Open Market Committee. He is also a member of the Federal Reserve Centennial Advisory Committee. He has a BA degree from McGill University, an MSc in economics from the London School of Economics, and PhD from the University of Chicago in 1972.

He has published many articles in leading journals including the Journal of Political Economy, the American Economic Review, the Journal of Monetary Economics, and the Journal of Economic History. He has authored and coedited fourteen books on monetary economics and monetary history. These include (with Owen Humpage and Anna J Schwartz), Strained Relations: US Foreign Exchange Operations and Monetary Policy in the Twentieth Century (University of Chicago Press, 2014); (with Athanasios Orphanides), The Great Inflation (University of Chicago Press for the NBER, 2013); (with Will Roberds), A Return to Jekyll Island (Cambridge University Press, 2013); (with Ronald MacDonald) Credibility and the International Monetary Regime (Cambridge University Press, 2012); (with Alan Taylor and Jeffrey Williamson), Globalization in Historical Perspective (University of Chicago Press for the NBER,2003). He is also editor of a series of books for Cambridge University Press: Studies in Macroeconomic History.

He is currently doing research on a Hoover Institution book project The Historical Performance of the Federal Reserve: The Importance of Rules, a project on “Bank Lending and Policy Uncertainty”; a project on “Financial Globalization and Financial Crises”; and a project on “Central Bank Credibility and Reputation: A Historical Perspective.”


Mickey D. Levy

Mickey D. Levy is a visiting fellow at the Hoover Institution and is a long-standing member of the Shadow Open Market Committee. He has spent most of his career conducting economic research in the financial sector, including a lengthy role as chief economist at Bank of America. His research focuses on monetary and fiscal policies and how they influence economic and financial market behavior.

Levy has conducted research on various aspects of modern monetary and fiscal policies. His earliest research was on the Federal Reserve’s debt monetization. He has also published numerous papers on the evolution of monetary and fiscal policies and how policymakers have adjusted their inflation and budget deficits targets.

His more recent research, conducted independently and in collaboration with other Hoover fellows and Shadow Open Market Committee colleagues, has analyzed the history of budget deficits and inflation; the Fed’s projections of the economy and inflation and how the Fed responds to deviations from its projections; cyclical patterns of the Fed’s monetary policy; the evolution of the Fed’s dual mandate, including the Fed’s misguided strategic plan of 2020; how the Fed’s projections during the COVID-19 pandemic led to policy mistakes; and the impact of tariffs on monetary policy. Levy’s fiscal policy research has emphasized the allocative effects of the changing composition of government spending and how they influence longer-run potential growth.

In addition to his published research, Levy has frequently testified before the US Congress on macroeconomic issues, banking, economic and inflation conditions, and global trade. He is a frequent contributor to articles in The Wall Street Journal and he is cited in the media. He earned a PhD in economics at the University of Maryland and a MPP at University of California, Berkeley.