Bush may name prof top adviser

Gregory Mankiw '80 has resigned from his post as one of President Bush's top economic advisers, a position he has held since 2003. Immediately following the announcement on Wednesday, news outlets reported speculation that Mankiw's successor will be Ben Bernanke, a professor on leave from the University's economics department and a current governor at the Federal Reserve.

Mankiw, whose departure as chairman of the White House Council of Economic Advisers (CEA) had been anticipated, will return to his teaching post at Harvard University. Bush is expected to name a successor in the coming days.

"I'm looking forward to going back to my family, spending more time with my children, my students and my books," Mankiw said Thursday in an interview with The Daily Princetonian.

Reached for comment Thursday, Bernanke declined to discuss "rumors and speculation" regarding Mankiw's successor, saying it would be inappropriate.

The White House press office did not return a request for comment.

Several media outlets, however, quoted anonymous Bush administration officials Thursday as saying that Bernanke, who joined the Fed's policy-setting board in August 2002, is the leading candidate to replace Mankiw.

Earlier this month, New York Times columnist Paul Krugman, also a professor in the University's economics department, speculated that Bernanke would be offered the CEA top job. Krugman noted that experience in the Bush White House would make Bernanke a better candidate to replace current Fed chairman Alan Greenspan, who is expected to retire next year.

Were Bernanke named Mankiw's successor, he would likely bring a similar economic philosophy to the CEA, according to Olivier Blanchard, a professor of macroeconomics at the Massachusetts Institute of Technology, where Bernanke received his Ph.D.

"I think their way of looking at the economy will be very similar," Blanchard said. "I would not expect any major differences between the two."

In the past, Bernanke has been consistent in voting with the majority of Fed governors to cut interest rates. "If anything, he will push policy in that direction, to reduce deficits," Blanchard said.

Mankiw declined to comment on speculation regarding his successor, though he was willing to offer some advice to the new chairman.

"What I would tell someone is that this is a great opportunity to take the lessons that we teach the students in the classroom and apply them," he said. "I feel I've contributed a lot to the policy process but I've also learned a lot about the policy process. It's very much a two-way street."

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"It's been a fantastic experience . . . What I'm really proud of is the team we've assembled here," he said, noting in particular the recruitment of Harvey Rosen, a Princeton economics professor, to the three-member CEA. "He's the person who taught me Economics 102 and got me interested in economics."

In the run-up to last year's presidential election, Mankiw drew fire when he said the outsourcing of American jobs to other countries was "probably a plus for the economy in the long run."

Speaking Thursday, Mankiw acknowledged the comment and the controversy it caused, but cautioned against politicizing economic questions.

"Trade policy is extremely divisive. If you look at Congress, trade issues often pass by very narrow votes," he said. "But when you're an economist, the economics of international trade is not complicated at all."

"Economists disagree about a lot of things . . . but I don't think we disagree about the theory of international trade," he added. "The basic theory dates back to David Ricardo's theory of international trade. Much of the world hasn't studied economics and hasn't been convinced of the theory. That's why I think teaching the theory of comparative advantage is so important. That's why voters need to be educated."

Includes reporting from Princetonian Senior Writer Christian Burset.