Janet Yellen, Distinguished Fellow 2012

Janet Yellen is a distinguished economist, policymaker, and policy advisor, who currently serves as Vice Chairman and Member of the Board of Governors of the Federal Reserve System. She previously served as President and Chief Executive Officer of the Federal Reserve Bank of San Francisco. She was the Chairman of the Council of Economic Advisors under President Bill Clinton from 1997 to 1999 and was a member of the Board of Governors of the Federal Reserve from 1994-97.

Janet Yellen did her undergraduate work at Brown University and received her PhD from Yale in 1971. She taught at Harvard from 1971-76, the London School of Economics from 1978-80, and has been affiliated with the University of California, Berkeley Haas School of Business since 1980, where she currently is Professor Emeritus. She was Vice-President of the AEA in 2004.

Janet Yellen has written on a wide variety of issues in macroeconomics and labor economics. She has been particularly concerned with the causes of involuntary unemployment. With her frequent co-author George Akerlof, she has explored the micro foundations of efficiency wages and shown the role that they can play in explaining labor markets and unemployment. Yellen and Akerlof have marshaled a wide variety of sociological and psychological studies to explain how fairness considerations affect workers’ productivity and firms’ compensation policies and may lead to market equilibrium where employers pay wages that exceed the marketclearing level. This line of work, emphasizing behavioral factors in macroeconomics, anticipated modern developments by many years. She has also authored and coauthored important papers on how monetary policy can affect real output if not all agents are fully rational. In “A Near-Rational Model of the Business Cycle, With Wage and Price Inertia” Yellen and Akerlof show that even small deviations from continuous optimizing behavior by agents or extremely small costs of adjustment can lead to first-order effects on real economic variables.

Janet has written on many other topics. Her concern about poverty and inequality is illustrated in her 1996 paper with Akerlof analyzing the causes of the rise in out-ofwedlock childbearing in the United States. She co-authored a major paper on the economic consequences of the reunification of Germany. She has been devoted to bringing the best of economic analysis to bear in policy making. In her many policy roles over the past twenty years, she has written or spoken about virtually all of the major economic issues of the day, ranging from the Asian Financial crisis to the bursting of the housing bubble and the resulting financial crisis and has provided lucid explanations of Quantitative Easing and other Federal Reserve policy innovations.

Janet L. Yellen’s election as Distinguished Fellow of American Economic Association recognizes a career of great service to scholarship, to policy, and to the Association.