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Alan Greenspan

Alan Greenspan. Background Information. 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 2 nd longest serving federal chairman Succeeded by Ben Bernanke

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Alan Greenspan

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  1. Alan Greenspan

  2. Background Information • 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

  3. Influence of current events • More recently, Greenspan's reputation has faltered along with the world economy, and hindsight-assisted 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.

  4. “Claim To Fame” • Chairman of Federal Reserve before Ben Bernanke Quote “Whatever you tax, you get less of.”

  5. 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

  6. Memory Aid • “B.L.A.M.E.” • Big Loss’ Alan, Monetary Economist

  7. 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

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