Ben Bernanke, chair of the University's economics department, will today move one step closer to the desk of Alan Greenspan.
The White House is expected to announce officially today that Bernanke has been nominated for the Federal Reserve's Board of Governors, senior White House officials said yesterday.
President Bush has decided to nominate Bernanke to one of two vacant positions on the seven-member board. Bush will nominate longtime Fed staffer Donald Kohn to fill the second post.
Bernanke declined to comment yesterday.
Several of his colleagues in the economics department said he is an excellent choice for the position, citing his expertise in monetary policy and scholarly achievements.
"I think it's a wonderful thing from the standpoint of the country's monetary policy because Professor Bernanke is . . . one of the preeminent monetary economists of his generation," economics professor Burton Malkiel GS '64 said.
Another colleague of Bernanke, Uwe Reinhardt, added he was pleased by Bernanke's appointment because it demonstrates that such appointments are not based solely on political considerations.
"He got there strictly by scholarly merit," Reinhardt said. "His research has always focused on the real world."
Economics professor Alan Krueger said Bernanke's background in monetary policy would benefit the Fed board.
"He has a great set of skills that the board could desperately use," Krueger said.
In addition to academic experience, Bernanke has previously delivered presentations at Federal Reserve meetings and served as a member of the National Bureau of Economic Research — a private research organization comprising a select group of economists. Bernanke is also editor of the American Economic Review.
Even before Bernanke had gained a spot on the board, several top economists have considered him a potential successor to Fed chairman Alan Greenspan.
Reuters reported in February a survey of economic forecasters that included Bernanke on a list of potential successors to the chairman.
If Bernanke's nomination is approved by the Senate, several of his colleagues said he might be in a good position to replace Greenspan. The Fed chairman will be 78 when his current term as Federal Reserve chairman ends in June 2004.
Reinhardt said that Bernanke's appointment to the board is a "stepping stone" in that direction.
"I don't think that Alan Greenspan would be reappointed," he said.
Reinhardt added that if the Senate approves Bernanke's nomination, he would be in an advantageous position for gaining the top spot.
"It gives [Bernanke] a chance to think about it and [the administration] a chance to look him over," he said.
However, Bernanke may not be the only Princetonian who could follow Greenspan.
Economics professor Elizabeth Bogan suggested professor Alan Blinder '67 — the Fed's vice chairman from 1994 to 1996 — as another possible choice for the top job.
"Ironically, Princeton has two people who would be an excellent replacement [for Greenspan]," Bogan said.
Professors in the economics department agreed that if appointed to the Fed, Bernanke would be missed by the University.
Economics professor Lars Svensson said that Bernanke would be a good replacement for Greenspan. "He would be a fantastic chair," he said. However, Svensson added that "there are lots of politics involved" that might prevent Bernanke from attaining the position.
Svensson also said that were Bernanke to fill Greenspan's empty seat, his presence would be missed at the University.
"It's a big loss to the department not having him around," he said. "But I guess it's really good for the country."
(The Associated Press contributed to this report.)
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