Stephen Moore Was a Threat to Groupthink at Fed

(p. A15) The following declaration may shock many of my academic colleagues: I support the nomination of Stephen Moore to the Board of Governors of the Federal Reserve.

I say so despite being immersed in the “professor standard” Herman Cain recently decried. I received my doctorate in economics from the Massachusetts Institute of Technology and did postdoctoral work at Harvard, was a professor of business economics at the University of Chicago, and for the past 43 years have taught finance at the University of Pennsylvania’s Wharton School.

The truth is that “professor standards” change. Early models of gross domestic product emphasized John Maynard Keynes’s model of aggregate demand—the amount of goods consumers and businesses’ desire to buy—as the source of national prosperity. Today, the vast majority of economists recognize that it is the supply side—increases in productivity driven by technological innovation—that creates long-term economic growth.

. . .

I’ve been supportive of Fed policy since the financial crisis. But any organization, even a great one, can easily fall victim to groupthink.

. . .

Mr. Moore’s appointment will not itself revolutionize policy-making at the Fed. He will be only one of 12 voting members of the Federal Open Market Committee who, along with seven regional Fed presidents, deliberate on monetary policy. But his presence would serve to remind Fed governors that there are many ways to interpret economic data. The hallowed corridors of our central bank deserve a breath of fresh air.

For the full commentary, see:

Jeremy J. Siegel. “A Professor For Stephen Moore; I don’t always agree with him, but he’d help solve the Federal Reserve’s groupthink problem.” The Wall Street Journal (Monday, April 29, 2019): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date April 28, 2019, and has the same title as the print version.)

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