Thursday, August 5, 2010

Bernanke Was a Poor Thesis Advisor

Gita Gopinath is profiled this morning in a WSJ piece.

She was just granted tenure in Harvard's economics department. While studying at Princeton, current Fed chairman Ben Bernanke was one of her thesis advisors. Although WSJ and Gopinath try to spin it as a positive, Gopinath clearly thinks Bernanke was an uncommunicative, poor thesis adviser. From WSJ:

Harvard’s Gita Gopinath remembers Ben Bernanke, who used to be one of her academic advisors, as being very reserved and hard to read. These are traits he exploits as a central banker.

“It was hard to figure out what he was thinking. That has served him well in his current job,” said Ms. Gopinath, who [sic] late April became the first Indian woman to get tenure at Harvard University’s economics department.

Gopinath says, according to WSJ, that "the chance of getting tenure at the Harvard economics faculty has been so low in recently [sic] that she hadn’t expected it." But obviously Harvard's economics faculty wanted her around. She'll do well at Harvard as long as she stays in line and doesn't make waves. And it's clear she knows how to play the game, singing high praise for Bernanke's mad scientist monetary strategy:
“He has used several unconventional instruments to stop the economy from going off the deep end and I believe he can be credited for preventing a much deeper world recession,” she said.
Back in the real world, Bernanke's stop-go monetary policy is the direct cause of the stop-go-stop economy. As for his "unconventional instruments", they did nothing but shovel money to the elite bankers. The basic instruments to control money supply (if that's what you want to do) using the Fed Funds rate, the discount rate and the reserve requirement worked just fine.

His introduction of new instruments, in the middle of a financial and economic crisis, requires that he be categorized as a mad scientist. It's not clear if  Gopinath understands this and is just playing the game in praising Bernanke's mad moves, but it is interesting that she does focus on, ahem, Bernanke's "unconventional moves."


  1. I still can't figure out your policies. You post a mug shot of the Russian spy, but not of her compatriots. And you post a picture of this econ PhD, but I've never seen photos here of all the other econ PhDs you regularly discuss.

    What's the pattern?

  2. BM - your question is tongue-in-cheek, right? Because the "policy" or "pattern" is quite obvious and effective.