Yellen to Leave Economic Post, Return to UC Berkeley Faculty
Janet L. Yellen, the soft-spoken academic who heads the White House Council of Economic Advisors, is resigning for personal reasons and will return to the faculty of UC Berkeley, administration officials confirmed Tuesday.
Her likely successor is Martin N. Baily, an expert on productivity who has served on the economic council, according to the White House.
Yellen’s exit represents the third departure of a major economic policymaker in just the last few weeks. Last week, Alice Rivlin announced her resignation as vice chairman of the Federal Reserve. And on May 12, Treasury Secretary Robert E. Rubin announced that he was leaving his job.
In a statement, President Clinton said of Yellen: “Her extraordinary intellect and keen grasp of domestic and international economics have contributed enormously to the formation of my administration’s policies in critical areas ranging from Social Security, health care and the budget to trade and international financial architecture.”
During Clinton’s term, Rubin and his lieutenants at the Treasury dominated White House policymaking in such key issues as taxation, the budget, Social Security and foreign financial turbulence, with Yellen and other advisors playing a less central role.
In part, this reflected Clinton’s formation of a separate National Economic Council inside the White House--run by Gene Sperling, a former Rubin protege--as well as the influence and political skill of Treasury officials.
At the same time, Yellen was well regarded within the administration, and Clinton recently asked her to serve as vice chairwoman of the Federal Reserve Board, an offer she turned down.
In an interview, Yellen, 52, said family considerations caused her to resign. Her husband, economist George Akerlof, was facing a deadline to return to his own job on the Berkeley faculty. In addition, their son just graduated from high school and will be attending college at Yale--one less reason for Yellen to remain in Washington.
Yellen moved from California to Washington in 1994 to take a seat on the Federal Reserve Board. She served on the Fed for more than two years before assuming the top job at the Council of Economic Advisors in early 1997.
Yellen, who has not decided on a departure date, said she will resume her academic career. Her research has been far-ranging, with a focus on issues related to labor and unemployment.
Yellen’s departure would leave the Council of Economic Advisors with only one member, Rebecca M. Blank. Clinton has nominated Harvard professor Robert Z. Lawrence to fill the other vacancy on the three-member panel, but the Senate has not yet acted on the nomination.
Baily, 54, served on the Council of Economic Advisors in 1995-96 and resigned to become a partner in the Washington office of McKinsey & Co., a consulting firm.
“We’re not 100% there, but Martin is our likely choice to succeed Janet Yellen,” said a White House aide.
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