The glass ceiling for women in economics has been cracked a little more in recent days. Last Wednesday, Janet Yellen was nominated by President Obama to become the chairwoman of the Federal Reserve. Many of us would think “Why should I care? What does it matter to me?” Or say, “I have midterms and papers to write, this does not affect me.” But the truth of the matter is that it does.
Okay, so before we figure out why she is qualified or how it affects college students, we should know what the Federal Reserve, aka the “Fed,” does. The Fed is the central bank of the United States. It is an independent entity, meaning it is not owned by anyone and it basically makes and sets the monetary policy banks follow.
A part of the Federal Reserve Board is The Federal Open Market Committee (FOMC), which that sets up monetary policies, including interest rates, which is something that greatly affects students.
This brings us back to why we should care about the Fed and who is running it. Interest rates affect all of us who take out loans for school or anything else we borrow money for. When we pay back those loans, there is interest, which is the sum we have to pay for borrowing that money in the first place. So, in general, people like low interest rates and after doing a lot of research, I believe Yellen will keep the interest rates fairly low.
Janet Yellen’s nomination is a step towards actual gender equality. Yellen will be one of, if not the most, powerful economists in the world. Many agree she is extremely qualified to do the job and perform well. If accepted by the Senate, she will also be the first Democrat to hold this position in almost 30 years. Yellen graduated as valedictorian from Fort Hamilton High School. She also received a degree in economics from Brown University and a Ph.D from Yale University. Yellen was also the chairwoman of the Council of Economic Advisers when Bill Clinton was president and was President of the Federal Reserve Bank of San Francisco. Since 2010, she has been the Vice Chairwoman of the Fed.
There was also a study done by the Wall Street Journal, which was comprised of over 700 predictions by 14 policy makers at the Fed. Of these policy makers overall, Janet Yellen had the most accurate predictions about inflation, growth and labor.
Two of the main goals of the Fed are to maximize employment and stabilize prices. For the most part, we all want unemployment to be as low as possible so we can get jobs once we leave Stony Brook University. Yellen has shown that she is more inclined to focus on unemployment, rather than inflation. It’s not that she does not believe in controlling inflation, she just believes that the unemployment rate is more important and inflation can fluctuate to accommodate it. In fact, Yellen was one of the main proponents of the idea that inflation should remain at two percent, a guideline the Fed tries to strictly follow. The idea that inflation is bad if it’s too high or too low was also something Yellen proposed. All of these factors will have a huge impact on us because of course we want there to be job opportunities once we graduate. Although she is not the only one who will influence the economy, she is a big part of it.
So with all of that being said, I believe Yellen is a good choice to be the chairwoman of the Fed. Even if you don’t agree with her policies, it’s still a big step in American history that a woman is holding this position for the first time in the Fed’s 100-year history.. Now, I don’t think Yellen is going to magically fix the entire economy and that debt will not exist, but I believe she is extremely well qualified for the position and was the right person to choose for the job.