Legendary economist and former US Federal Reserve chairman Alan Greenspan, a pivotal figure in shaping the American economy for decades, has passed away at the age of 100 due to complications from Parkinson’s disease.
Photograph: Jonathan Ernst/Reuters
Key Points
- Legendary economist Alan Greenspan, former US Federal Reserve chairman, passed away at 100 due to complications from Parkinson’s disease.
- Greenspan served under four US Presidents from 1987 to 2006, overseeing a period of significant economic expansion.
- He was known for deregulating financial markets and using monetary policy to combat inflation, but also faced criticism for policies that some believe contributed to the 2007-08 financial crisis.
- Greenspan coined the term “irrational exuberance” in 1996 to describe investor enthusiasm driving up asset prices beyond real economic conditions.
- A trained economist, Greenspan rose from humble beginnings to become one of the most influential Federal Reserve chiefs in history.
Legendary economist and long-time Federal Reserve chairman Alan Greenspan has died at the age of 100 due to complications related to Parkinson’s disease.
His death was confirmed by his wife of 29 years, Andrea Mitchell, who is the chief Washington correspondent and chief foreign affairs correspondent for NBC News.
“Alan passed away at our home this morning at the age of 100 from complications of Parkinson’s disease,” Mitchell said in a statement, according to an NBC report.
“He was a giant of a man who helped shape the U.S. economy for decades under presidents of both parties, but was always honest in acknowledging his mistakes,” the statement read.
A Legacy of Influence and Debate
Greenspan served under four US Presidents right from the close of the Cold War era in 1987 till 2006, just before the beginning of the global financial crisis.
Greenspan was known as a free-market champion who was credited with deregulating the financial markets but also blamed for sowing the seeds of what would later become the 2007-08 global financial crisis.
The second longest-serving Federal Reserve chairman, Greenspan rose from humble origins.
Born to Jewish parents and in the Jewish enclave of Washington Heights, New York, Greenspan went on to become one of the most influential Federal Reserve chiefs.
Early Career and Economic Philosophy
A trained economist from New York University, Greenspan became chairman of the President’s Council of Economic Advisors during Nixon’s last year in office in 1974.
He continued in the position when Gerald Ford took over as US President till 1976.
When Greenspan first took public office as an advisor, interest rates were regulated.
There were hardly any financial derivatives, and the value of the dollar was pegged to gold. Under Greenspan, the US economy boomed in what is the longest period of expansion from 1991 to 2001.
Greenspan was an associate of Atlas Shrugged writer and free-market proponent Ayn Rand in the 1950s.
“Ayn Rand and I remained close until she died in 1982, and I’m grateful for the influence she had on my life. I was intellectually limited until I met her,” Greenspan wrote in The Age of Turbulence: Adventures in a New World.
Monetary Policy and “Irrational Exuberance”
Greenspan is known for using monetary policy to launch pre-emptive strikes at inflation but is also criticised for keeping interest rates low during the early 2000s that many think led to the global financial crisis later on in 2007.
During a speech in 1996, Greenspan coined the term “irrational exuberance”, describing a phenomenon when investor enthusiasm drives up asset prices that are devoid of the real economic conditions on the ground.
