Economist Brusca: Yellen Won't Be Another Bernanke

Sunday, 16 Feb 2014 08:00 PM

By Dan Weil

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While many experts concluded from new Federal Reserve Chair Janet Yellen's congressional testimony last week that she would essentially be a clone of her predecessor Ben Bernanke, that's not the case, says Robert Brusca, chief economist of Fact and Opinion Economics.

"I would label Bernanke as a cyclical dove. His dovish nature about policy developed after a career of studying the Great Depression and what went wrong," Brusca writes on CNBC.com.

"He concluded that the main policy mistake was to remove stimulus too soon. The thrust of policy under Bernanke was to make policy stimulative and to keep it stimulative for a long time."

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But Brusca doesn't see Bernanke as an ideologue.

"In contrast, Yellen is a Democrat. Democrats believe in the inefficiency of economic systems and in the rightful role of government intervention," Brusca says.

"I think of Yellen as a structural dove. She and Bernanke were on the same page because of the state of the economy."

But eventually, Yellen will likely take a policy turn that Bernanke wouldn't have, though "that does not mean she will naturally be an easy-money person," Brusca writes.

John Cassidy, an economics writer for The New Yorker, sees Yellen as a dove as well. "For decades, progressives have called for a Fed chief who is as concerned about jobs and living standards as she is about combating inflation," he writes. "Now, they’ve got one."

Editor’s Note: 18.79% Annual Returns . . . for Life?

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