G-17: Domestic Policy

Chapter 17a – Learning Objectives 1-5Economic Theories

Fiscal Policy vs. Monetary PolicyAnd…

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Chapter 17- Domestic Policy • (1). Outline the various economic theories proposed for managing the economy.• (2). Contrast fiscal policy and monetary policy, and explain the key role of “the Fed.”• (3). Assess Government's ability to manage the economy in view of the Lucas critique.• (4). Discuss US distribution of income & wealth and the role of supply-side economics.• (5). Assess whether the US should pursue an industrial policy or remain a free market.• (6). Describe the basic concepts & categories of how the Government regulates business.• (7). Describe the key government economic and social regulatory agencies & their role..• (8). Assess the effectiveness and projected impact of current environmental policy.• (9). Describe the various concepts and categories of Social Welfare policy.• (10). Contrast social insurance w/public assistance & explain the role of means testing.• (11). Outline Social Welfare Policy and assess impact of the Social Security Act of 1935.• (12). Assess the current and future status of Social Security, Welfare, and Health Policy

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Managing the EconomyA Brief Historical Overview

• From Government Restraint to Government Intervention:– 1800 to early 1900s=> Restraint dominated by the late

18th century economic theory - known as:• Classical economics=> based on lassez faire*

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An economic theory, dominant at the start of the twentieth century, that argued that the federal government's only role in the economy was to ensure a stable supply of money.

Theory applied to President Hoover’s balanced budget as solution to what major economic crisis?

Managing the EconomyA Brief Historical Overview (1929 thru 1930s)

• Start of the Great Depression=>– 25% unemployment

• 1929 stock market crash=> – Homeless named where they were lived “Hoovervilles” in protest lack

of aggressive Federal action– Public impatient with inability of Government to fix problem

• 1932 Presidential election => – Landslide election of FDR– First Hundred Days =>– Aggressive Federal action to fix $$$– New Deal programs=>

• Federal projects & spending– Objective: spur economy to life=>

• get America back to work• Examine FDR’s $$$ policy to spur economy 4

FDR’s Economic Policy- Summary

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• Major economic events and actions of FDR’s Presidency:

•Became President in 1933

•During Great Depression the U.S. suffered 25% unemployment

•Roosevelt’s Administration instituted the New Deal

• At first employed public works programs.

• Later used government spending to spur on the economy

What kind of Government economic policy uses spending to spur economy?

?_____________ Policy

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Using the federal government's control

over taxes and spending to influence the condition of the national economy.

Managing the Economy: Fiscal Policy • Fiscal Policy *

– Government policy to Tax and Spend– What economic theorist came up with this concept?

• John Maynard Keynes – 20th century economic theorist– Wrote: General Theory of Employment, Interest, & Money

– Keynes’ thesis:• Less jobs=> less $$$=> low consumption • Less spending => Low demand=> result?• Low GDP ( & downward spiral continues & perpetuates)

• What was Keynes’ economic theory called?7

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An economic theory, based on the work of British economist John Maynard Keynes, that contends that the national government can manage the economy by running budget surpluses and budget deficits.

?__________ Economics

Role Played by Keynesian Economics

• Active government role in the Nation’s economy: – Create surplus & deficit – how?– Through manipulation of the Budget

• Objective: – Stimulate or retard a “Boom or Bust” economy

• How achieved?=> – Federal action: spend (put more $$ into economy)

or…– Tax (take money out of Nation’s economy) – Forever after associated with “New Deal Democrats”

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Application of Keynesian Economics• During Recession:*• Government should spend

to raise demand & thus spur economy

• Okay to run a budget deficit

• Overheated economy:• Government should cut

spending to control inflation (How?)

• Raise taxes to take $$ out of economy

• This will cut demand & slow economy down

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Complication to above theory: counter-cycle programs

Automatic government programs “kick in” to counter downturn Food Stamps Public Assistance Unemployment compensation

Examine Recession cycle in greater detail*

Cycle of Recession

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Supply and

demand for goods

and services

fall

Because businesses can’t sell goods, they

fire workers and produce less

Because people

have less money, they buy

less

Unemployment rises and the

overall GDP* falls

Key Term Review

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An economic theory, based on the work of British economist John Maynard Keynes, that contends that the national government can manage the economy by running budget surpluses and budget deficits.

A measure of a country's total economic output in any given year.GDP

Keynesian Economics

Managing the Economy• Besides Fiscal Policy (or Federal Tax & Spending)

– What’s the other way to manage the economy?• Controlling the Money Supply• What economic theory advocates control of money

supply?• Monetary Theory:

– Nation’s money supply is primary to economy’s health– Therefore controlling the circulation of money in

Nation’s economy will control inflation or spur economic growth

• Who controls the Nation’s money supply and how does it control it?

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The ?__________ ?__________• An independent regulatory commission that Congress

created in 1913 to oversee the nation's money supply.

• How does Federal Reserve control the money supply?

• “The Fed” controls the Nation’s money supply in 3 ways:

– 1. discount rate => (i.e. short term interest rates)

– 2. Buy or sell U.S. Treasury Securities=> (US Savings Bonds)

– 3. Change required reserve ratio that Banks must hold:

• Ratio of money that Banks must hold in reserve & can’t loan

• Examine structure of the Federal Reserve=>14

The Federal Reserve

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• Four Key Parts: 1. The Board of ?__________ 2. The Federal ?_______ ?_________ Committee 3. Twelve Regional Federal ?__________ Banks 4. The ?__________ banks that are members of

Federal Reserve System*

Federal Reserve System

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Who heads this system?

Chairmen of the Federal Reserve

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•Ben S. Bernanke was sworn in onBen S. Bernanke was sworn in on

Ben S. Bernanke was sworn in on February 1, 2006, as Chairman and a member of the Board of Governors of the Federal Reserve System. Dr. Bernanke also serves as Chairman of the Federal Open Market Committee, the System's principal monetary policymaking body. He was appointed as a member of the Board to a full 14-year term, which expires January 31, 2020, and to a four-year term as Chairman, which expires January 31, 2010.

Government Management of the Economy • Assessment:

– Can the Government effectively manage the economy? • Role & impact of the Robert E. Lucas critique

– Chicago New Classical school of economics– Public’s & private corporations’ response to Gov. actions to

counter its ill effects on their $$ interests• The Neo- or “new Keynesians”

– Employed math models showing that wages tended to be “sticky”

• Debate & disagreements centered around following: – How economy works & proper Gov. policy to be applied

• Bottom Line: – No sure resolution on Gov. role (big or small role)

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Current Status of Economic Stewardship • 12 economists with 13 conflicting opinions• Applying Fiscal & Monetary controls=>

– Aim: economic stability• Continuing disagreements over how to manage economy:

– Distribution of Income & Wealth– Supply-side economics & the “trickle down” effect– Industrial Policy (as practiced in Japan)

• Impact on economy of Government management actions? – Governments Track Record?– Gradual dampening of Boom & Bust swings*– Examine recent trends since 1950 => *

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A Century of US Economic Growth

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Debate over Management of Economy• Continuing disagreements over how to manage economy:

– Growing gap: Distribution of Income & Wealth:

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101520253035404550

1980 1998

Richest 20%Poorest 20%

21U.S. income distribution as a percentage of income earned

2005

US Wealth & Income DistributionAnother Perspective:

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Wealth: income, real estate, stocks, bonds, and material goods.

Top 1% ($2.3M+)

Control 40% of all wealth in United States

Top 20% ($1.8K+)

Control 80% of all wealth in the United States

Debate of Management of Economy – Alternative Theories & Variations

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An economic theory that argues that if the government cuts taxes, reduces spending, and eliminates

regulations, resources will be freed up to fuel the economy to produce even more goods and services.

•Another proposal to manage economy?

•?__________ Policy* (as practiced in Japan)

Supply Side Economics* & the “Trickle Down” Effect

Industrial Policy*

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Government Aid

The government selects an industry that it thinks can be a world leader and spur

on the economy

Tax Incentives

R & D Funds

Regulation Exemption

Any downside to this approach?

Industrial Policy Challenges• How ?__________ can government bureaucrats

predict which particular industry or corporation will be the next up and coming winner?– Past government track record & efficiency in spending

money don’t inspire confidence

• What if investors in the market or future consumers disagree with the government’s ?__________ & ?__________ or go another direction instead?

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Chapter 17b: Domestic Policy (continued)

• Learning Objectives 6-12

Regulatory policy:

1. Economic regulation*

2. Social regulation*

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Regulating Business• Regulatory policy

– Origins: Interstate Commerce Act of 1887 (Box 17-1)• Purpose: Control unfair & monopolistic practices of who?

– “Short” versus “Long Haul” prices to market?

• Public attitude towards regulatory policy=>– Mixed & many times conflicting – why?

• Theory versus reality– Theory: Government should stay out of business versus?– Reality: Consumer protection & small businesses

• Two major categories Regulatory policy? – 1. ?__________ regulation*– 2. ?__________ regulation*

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Regulations- Two Different Types:

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• Rules affecting business practices

• Seeks to ensure competition and prevent illegal monopolies

?__________ Regulations*

?__________ Regulations*

• Rules that protect citizens from dangerous or unfair practices associated with how businesses produce products or with the

products themselves.

Objectives of Economic Regulation

• Government influences competitive practices of industry– Promote competition (& prevent monopolies)

• Microsoft: Stifled competition & innovations in software

– Control firms’ entry into industry • Or… control the industry’s prices when a Monopoly is

necessary- example?• RR & role of Interstate Commerce Commission of 1889

• Disagreement in principle & practice continues:– Impact of recent trends in deregulation

• Failure of Savings & Loans (1980s) & Airlines industries

• How has economic regulation evolved over US history?– Evolved in three major phases*

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Important Events in Economic Regulation- Phase I:• Congress responds to farmers’ and small businesses’

complaints about major monopolies & trusts– 1887 establishes Interstates Commerce Commission

(ICC)• Commission with no real enforcement capability

– 1890 Sherman Antitrust Act (against monopolies)• General statement of intent (still lacked teeth to enforce)

– 1914 Clayton Antitrust Act• Fix above weakness- established enforcement mechanism

– 1914 Federal Trade Commission Act• (Same as above)

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Events in Economic Regulation - Phase II

• More regulation following events leading to Depression– 1934 Federal Communications Commission (FCC)– 1934 Securities and Exchange Commission (SCC) – 1938 Civil Aviation Board (CAB)

• 1960s=> Federal Government established four key areas of economic regulatory policy:– 1. Antitrust- Prevent monopolies & encourage competition

(Microsoft suit)– 2. Financial Institutions- Savings & Loans/SEC/Enron debacle– 3. Transportation- Air/Ground/Rail– 4. Communication- FCC (Radio & TV)

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Events in Economic Regulation- Phase III• Economic Regulation=> 1970s through present:

– Deregulation=> benefits & unintended consequences • Mixed bag- sometimes good & sometimes bad:

• When is Deregulation good ?– ?__________ rises & prices fall=> benefits consumer

• Examples: Telecoms, Computers, Airlines

• Deregulation can be very bad for the public when:– Corporate greed leads to poor service & risky business decisions

• Airline service to passengers declines• Savings & Loan default (tax payers pick up multi-B$ tab)• Stock Market price manipulation & fraudulent accounting

– Such as Enron debacle (life savings & retirement lost)32

Social Regulation • Social Regulation focus on conditions under which=>

– Goods & services are produced• When contrasted with economic regulation:

– Social regulations cut across industries • (vice focus on a specific industry)

– Regulations grounded in specific technical legislation • Very specific & detailed

– vice vague & general guidelines of economic regulations

• Aim: protect public interest• Principal Federal Agencies established to administer:

– Social regulation from 1930 through 1975 (See Table 17-1)*

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Social Regulation Agencies

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Agency YearFood and Drug Administration 1930

National Labor Relations Board 1935

Equal Employment Opportunity Commission

1964

Environmental Protection Agency 1970

Occupational Safety and Health Admin. 1970

National Highway and Traffic Safety 1970

Consumer Product Safety Agency 1972

Nuclear Regulatory Commission 1975

Protecting Worker Safety and Health • Occupational Safety and Health Act of 1970

– Created OSHA => regulate industry=> worker safety

• Problems & criticism?– Too ?__________ & ?__________ regulations– Employers complaints (time & $$$ to comply)

• Advocates for OSHA?– Labor Union & consumer advocates => support – Favor posted OSHA regulations (see example)*

• Debate OSHA’s over proper role continues – Debate centered around costs versus benefits gained

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OSHA Regulations – example:

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Protecting the Environment

• Evolution of Environmental Policy (Silent Spring)– 1960s => environmental activists movement– Union Oil of California oil spill off Santa Barbara=>

• VIP & public outcry (who owns homes off West Coast?)

• National Environmental Policy Act (1969):– Requirement for Environmental impact statement– Required for all government agencies– Later exploited by environmental activists

• (Endangered Species Act)

• Nixon consolidates various agencies into EPA (1970) – Vast array of laws & regulations ensued (Table 17-2)*

• (It was the early 70s after all)37

EPA Responsibilities

38So what areas exactly does the EPA regulate?*

Protecting the Environment

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The Environmental Protection Agency regulates:

•?__________ Quality

•?__________ Quality

•Disposal of ?__________ Waste

•Chemicals

•?__________ Levels

Any problem* w/Government regulations to protect the environment?

Significant potential for ?__________ ConflictWho is affected?

Political Conflict & Who is effected

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Congress

President

EnvironmentalPolicy impact

Public

Republicans DemocratsWhy?

regulationsregulations

Environmental Policy Conflict & Its Impact

• Political conflicts of Environmental Protection– Environmental policies creates: ?__________ & ?

__________ – Due to those affected by benefits vs. costs– Somebody has to pay for it

• Other related factors:– Diffused benefits (to Public) with specific costs to a few (Industry)– Benefits often hard to measure– Measuring extent of environmental problem very difficult– Costs rise significantly for each incremental improvement gained

at the margin

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Future Directions• Future Directions for Environmental Policy

– Direction taken depends on whose in power:– As a result=> conflicting guidance given to the EPA – Democrats: want more environmental regulation – GOP: favor business & therefore want less regulation

• Options for how government protects environment – Three different methods:– 1. Command & ?___________ *– 2. ?__________________ incentives– 3. ?_____________________ prevention

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Differing Options to Protect EnvironmentA Comparison:

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Command and ControlMarket Incentives &

Pollution Prevention• Agencies draft

regulations

• Agencies dictate enforcement mechanisms

• Establish allowable pollution levels

• Issue permits to pollute

• Recipients can trade and sell permits

Debate & great conflict over environmental policy to continue

Vs.

Social Welfare Policy

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Government programs that provide goods and services to citizens to improve the ?______ _ ____ _______.

What is Social Welfare Policy?

Promoting Social Welfare• Federal government runs broad range of programs

– Several specifically designed to promote social welfare• Basic concepts & functions of Social Welfare Policy

– Federal programs designed specifically to provide: • goods & services to improve Public’s quality of life

• What are the two major categories of Social Welfare?– 1. Social ?_____________ programs & qualifications

• You pay in to the program=> you qualify (example?)• Social Security & Medicare

– 2. Public ?_____________ programs & qualifications • ?______________ tested (?) programs- (examples?)• SSI, Food Stamps, & Medic?______ 45

Social Welfare strategies• What are the three social welfare strategies?

– 1. ?______________ • Programs designed to alleviate or lessen effects of poverty• (food stamps & “Meals on Wheels”)

– 2. ?______________ • Programs designed to prevent or avoid poverty• (Unemployment Compensation & Social Security)

– 3. ?______________ • Programs designed to “cure” poverty conditions at its root• (“Head Start” & job training)

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If given an example, can you ID the proper strategy?!

Social Welfare Programs

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• Income ?______________ programs• Nutrition programs• Health programs• ?______________ programs• Education programs• Social ?______________ programs

What are the different types of Social Welfare Programs?

See Table 17-3 for specific associated programs by type

The Evolution of Social Welfare Policy • Welfare as private sector & local responsibility

– True for first half of our Nation’s history• Federal government initial involvement: “deserving poor”

– 1880s thru 1910s => • Focused on disabled & elderly Union Veterans

• State government also expanded selective benefits – Addressed needs of other poor citizens– Both Federal & State governments target “deserving poor” only

• Then what major event caused both to reconsider who should take lead in addressing needs of its citizens? *– What major legislation was enacted as a result?*

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Impact of Great ?_________ & the ?_______ Deal

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• Act established Federal programs providing goods & services to improve the lives of American citizens in two major areas:

• 1. Provided Social ?______________ programs for elderly and disabled

• 2. Established Public ?______________ programs to help blind, elderly, and dependent children

Social Security Act of 1935*

Nationalizing Social Welfare – A Summary

• Social Security Act of 1935 – Significantly expanded Federal government’s welfare role

• Social insurance programs (elderly & unemployed)– Created as old age & survivors program– 1956: Congress adds Disability Insurance

• Social Security has grown significantly over the years – Both in number of “entitled” and costs of administration– Beneficiaries grew from 222K in 1940 to 46.4 Million in 2002– Increased costs: $32M (1940) to $454 Billion in pay out in 2002

• Cost increase due to inflation & COLA over 60 year span• FICA deductions have also increased (see Chapter 16)

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Public Assistance Programs • Administration of Public Assistance left to states =>

– Responsible for managing care for elderly, poor, & blind

• 1972: Congress standardized benefits & eligibility– Supplemental Security Income (SSI)– Cost grew: from $495 Million in 1940 to 32.2 Billion in 2001

• 1960s: ADC => AFDC (controversial from start)– 1996: Congress replaced AFDC with TANF

• 1964: LBJ’s War on Poverty resulted in:– Number of additional programs created– Economic Opportunity Act of 1964 – Job Corps & Head Start (associated with what strategy?)– Food Stamp program (significantly grew over decades)

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Public Assistance Programs - problems

• Many War on Poverty programs eventually phased out – why?

• Activists poor of 1960s challenged established power– Traditional Public Assistance establishments controlled

distribution of Public Assistance • (and resented Activists’ challenge to their established Power)

– Strong political bias for alleviative/preventative & against ?_________ programs ultimately shapes policy

• What about the Nation’s Health Care system?52

Health Care• Two major categories of Health Care?

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Medic?___ * Medic?___ **(versus)

What’s the difference between the two?

*A social ?_______ program that provides basic hospital insurance and supplementary insurance for doctors' bills and other health care expenses for people over the age of 65 or older

(Entitlement)

**A public ?__________ program that provides publicly subsidized health care to

low-income Americans.

(Means Tested)

Current Status of Social Welfare Policy • Criteria used to measure Social Welfare Policy

status:– 1. Social welfare Policies of other Industrial

Democracies– 2. Social Welfare vs. other types of U.S. government

spending– 3. Spending on different types of Social Welfare

programs– 4. Objective measurements of success of Social Welfare

Programs

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1. Policies of other Industrial DemocraciesA Comparison

• Full Health care provided by other Industrial Democracies

• US spends less on social welfare than Japan & Europe– US spends 30% of Budget vs. 40% of European budgets– Europeans receive greater amount of government

services• European health care paid in full by government

• American tradition of relying on private sector– Strong bias against big government & social medicine

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2. Social Welfare vs. other types of spending

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3. Spending on different types of Social Welfare

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Year Social Insur-ance

Public Aid

Health/ Medical

Veteran’s Programs

Education Housing Other

1970 49.5% 14.3% 18.8% 10.8% 0.6% 1.3% 0.1%

2000 42.0% 10.5% 41.8% 2.5% 1.1% 3.0% 0.2%

Distribution of Social Welfare Expenditures Across Programs

4. Measuring success of Social Welfare• Conservative position: complete failure

– Traps poor in poverty cycle=> permanent underclass• Liberal position: work in progress

– Needs moderate reform but still considered effective• Objective measures => reveals mixed success

– Poverty has fallen since 1970 (from 13%)– 2000: fell to 11.3% poverty rate=> then back up to 12.5 in 2003

– Nevertheless: major gap exists between two groups:• Old (10.2%) vs. poor children (17.6% in 2003) & growing

– Infant mortality rate has fallen to 7 per 1000 births• Social effects on society also reveal some negatives:

– Significant increase in divorce, single parent families, & crime 58

The Future of Social Welfare Policy • Social Security – two debated questions

– 1. On whom should government spend $$$ (old or young?) – 2. Is Social Security headed for insolvency?*

• (and what should we do about it if it is?)• Welfare Policy – the uneasy balance in conflict:

– The safety net versus the free ride – 1996 Welfare Reform law:

• Abolished AFDC => TANF - striking a proper balance?• Concerns: Impact of the economic recession on unemployed?• Poor & unemployed trying to make ends meet at the margin

• Health Policy* => Two major concerns: cost & access– How to stem medical costs & who should have access to it

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Social Security – future insolvency?

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Options to address problem?

Increase ?_______, reduce ?_______, or restrict ?_______

Major concerns with Health Care system• Access to and Cost

61Who pays the costs of the uninsured?

Impact of Baby Bommers

Next Class Assignment• Chapter 18a: Foreign Policy

– Learning Objectives 1-5

• Chapter 18b: Foreign Policy (Part II) – Remaining Learning Objectives 6-10

• Preparation for Course Review (in 2 weeks)– Also: RESEARCH PAPER IS DUE in 2 weeks!!!

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Chapter 17- Key Terms• Counter-cyclical programs: Government programs that automatically increase

spending when the economy slows down and unemployment rises, and decrease spending when the economy speeds up.

• Economic regulation: Laws and governmental rules that affect the competitive practices of private business.

• Environmental impact statement: A document federal agencies must issue that analyzes the environmental impact of any significant actions they plan to take.

• Federal Reserve System: An independent regulatory commission that Congress created in 1913 to oversee the nation’s money supply.

• Fiscal policy: Using the federal government’s control over taxes and spending to influence the condition of the national economy.

• Food Stamp program: A public assistance program established in 1964 that provides stamps (or coupons) to low-income people to buy food.

• Gross domestic product (GDP): A measure of a country’s total economic output in any given year.

• Industrial policy: The policy of seeking to strengthen selected industries by targeting them for governmental aid rather than letting the forces of the free market determine their fates.

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Chapter 17- Key Terms (2)• Keynesian economics: An economic theory, based on the work of British

economist John Maynard Keynes, that contends that the national government can manage the economy by running budget surpluses and budget deficits.

• Laissez faire: An economic theory, dominant at the start of the twentieth century, that argued that the federal government’s only role in the economy was to ensure a stable supply of money.

• Lucas critique: An economic theory that contends that if people act rationally, then their reactions to changes in government policy will often negate the intent of those changes.

• Means test: A requirement that people must fall below certain income and wealth requirements to qualify for government benefits.

• Medicaid: A public assistance program that provides publicly subsidized health care to low-income Americans.

• Medicare: A social insurance program that provides basic hospital insurance and supplementary insurance for doctors’ bills and other health care expenses for people over the age of 65.

• Monetary theory: An economic theory that contends that a nation’s money supply, or the amount of money in circulation, is the primary if not sole determinant of the health of the national economy.

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Chapter 17- Key Terms (3)• Public assistance: Government programs, such as Medicaid and food stamps, that are

funded out of general tax revenues and that are designed to provide benefits only to low-income people.

• Regulatory policy: Laws and government rules targeting private business for the purpose of (1) protecting consumers and other businesses from what the government deems unfair business practices; (2) protecting workers from unsafe or unhealthy working conditions; (3) protecting consumers from unsafe products; and (4) protecting a number of groups from discrimination.

• Social insurance: Government programs such as Social Security and Medicare that require those who will receive benefits to make contributions (otherwise known as taxes) and that distribute those benefits without regard to the recipient’s level of income.

• Social regulation: Laws and governmental rules designed to protect Americans from dangers or unfair practices associated with how private businesses produce their products as well as from dangers associated with the products themselves.

• Social welfare policy: Government programs that provide goods and services to citizens for the purpose of improving the quality of their lives.

• Supply-side economics: An economic theory that argues that if the government cuts taxes, reduces spending, and eliminates regulations, resources will be freed up to fuel the economy to produce even more goods and services.

• Temporary Assistance for Needy Families (TANF): A public assistance program that provides government aid to low-income families with children for a limited amount of time.

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Back-up Slides

66

Ben S. Bernanke

• Ben S. Bernanke was sworn in on February 1, 2006, as Chairman and a member of the Board of Governors of the Federal Reserve System. Dr. Bernanke also serves as Chairman of the Federal Open Market Committee, the System's principal monetary policymaking body. He was appointed as a member of the Board to a full 14-year term, which expires January 31, 2020, and to a four-year term as Chairman, which expires January 31, 2010.

• Before his appointment as Chairman, Dr. Bernanke was Chairman of the President's Council of Economic Advisers, from June 2005 to January 2006.

• Dr. Bernanke has already served the Federal Reserve System in several roles. He was a member of the Board of Governors of the Federal Reserve System from 2002 to 2005; a visiting scholar at the Federal Reserve Banks of Philadelphia (1987-89), Boston (1989-90), and New York (1990-91, 1994-96); and a member of the Academic Advisory Panel at the Federal Reserve Bank of New York (1990-2002).

• From 1994 to 1996, Dr. Bernanke was the Class of 1926 Professor of Economics and Public Affairs at Princeton University. He was the Howard Harrison and Gabrielle Snyder Beck Professor of Economics and Public Affairs and Chair of the Economics Department at the university from 1996 to 2002. Dr. Bernanke had been a Professor of Economics and Public Affairs at Princeton since 1985.

• Before arriving at Princeton, Dr. Bernanke was an Associate Professor of Economics (1983-85) and an Assistant Professor of Economics (1979-83) at the Graduate School of Business at Stanford University. His teaching career also included serving as a Visiting Professor of Economics at New York University (1993) and at the Massachusetts Institute of Technology (1989-90).

• Dr. Bernanke has published many articles on a wide variety of economic issues, including monetary policy and macroeconomics, and he is the author of several scholarly books and two textbooks. He has held a Guggenheim Fellowship and a Sloan Fellowship, and he is a Fellow of the Econometric Society and of the American Academy of Arts and Sciences. Dr. Bernanke served as the Director of the Monetary Economics Program of the National Bureau of Economic Research (NBER) and as a member of the NBER's Business Cycle Dating Committee. In July 2001, he was appointed Editor of the American Economic Review. Dr. Bernanke's work with civic and professional groups includes having served two terms as a member of the Montgomery Township (N.J.) Board of Education.

• Dr. Bernanke was born on December 13, 1953, in Augusta, Georgia. He received a B.A. in economics in 1975 from Harvard University (summa cum laude) and a Ph.D. in economics in 1979 from the Massachusetts Institute of Technology.

• Dr. Bernanke is marr67

Next Assignment (Fall)• Chapter 17b: Domestic Policy

– Learning Objectives 6-12 (Economic & Social Policy)

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Next Week’s Assignment (Spring)

• Tuesday: Chapter 17b: Domestic Policy (continued)– Learning Objectives 6-12– Regulatory policy:

• 1. Economic regulation*• 2. Social regulation*

• Thursday: Chapter 18a: Foreign Policy– Learning Objectives 1-5

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