Citation:

Paul F. Gentle. "Some Facts about Paul Volcker as Chairman of the Federal Reserve (August 6, 1979 – August 11, 1987)" International Research Journal of Economics and Management Studies, Vol. 2, No. 4, pp. 533-538, 2023.

Abstract:

The Federal Reserve system in the United States plays a key role in the economy. It is supervised by the sevenmember Board of Governors of the Federal Reserve. The key person on the board is the Chairman of the Federal Reserve. A very notable chairman was Paul Volcker. He was Chairman of the Federal Reserve from August 6, 1979, through August 11, 1987. His chairmanship is especially important in examining the disinflation of the 1980s. In order to quell the high inflation, Volcker had to pursue a more restrictive monetary policy than was pursued in the few years before he became Federal Reserve chairman. Volcker earned a Bachelors degree from Princeton and a Masters from Harvard. Additionally, he studied at the London School of Economics. He worked in various capacities at Chase Manhattan Bank, the U.S. Treasury and the New York Federal Reserve Bank before becoming Chairman of the Federal Reserve. After his terms as Federal Reserve chair, he worked in investment banking and international economic and monetary affairs and had recommendations regarding international accounting standards. He also was chair of an Independent Committee to examine the unfinished stories of the Holocaust’s Jewish victims. He was picked to investigate potential wrongdoing in the Iraqi Oil for Food initiative. He belonged to numerous international organizations and received a multitude of honors and honorary degrees. He is credited with helping the prestige of the Federal Reserve Banking system. The Federal Reserve Banking system has at its head a seven-member Board of Governors at its head. The seven members of that board are appointed by Presidents and confirmed by the Senate (Mishkin, 2018). The board sets monetary policy. It is implemented through the twelve Federal Reserve banks scattered across the country. They are in Atlanta, Boston; Chicago; Cleveland; Dallas; Kansas City, Missouri; Minneapolis; New York; Philadelphia; Richmond, Virginia; St. Louis, Missouri; San Francisco. In addition, there are sub-branches as well (Mishkin, 2018). One of the posts that Paul Volcker held before becoming Chairman of the Federal Reserve was that of president of the New York Federal Reserve, whose branch has special significance. The Fed Open Market Operations are implemented at that branch. Also, New York is home to some of the very largest banks. So Volcker, having been president of the New York branch of the Federal Reserve, helped prepare Volcker for the ultimate role of Chairman of the Federal Reserve (Mishkin, 2018). The next section of this paper will review the education and career of Volcker prior to his appointment as chair of the Federal Reserve. Then, his work as Chairman will be summarized. After that, some graphs of certain variables will be displayed. He also had an eventful post-career after the Fed. This will be explored, as well. Finally, there will be a summary conclusion of this article.

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Keywords:

Paul Volcker, Recession 1980-82, Stagflation, Inflation, Monetary Policy, Federal Reserve Board of Governors.