Stanley Fischer

Stanley Fischer, 2010

Stanley Fischer (Hebrew: סטנלי פישר‎‎; born October 15, 1943) is an economist and the vice chair of the U.S. Federal Reserve System. Born in Northern Rhodesia (now Zambia), he holds dual citizenship in Israel and the United States. He served as governor of the Bank of Israel from 2005 to 2013. He previously served as chief economist at the World Bank.

Quotes

• Currency competition and free banking might increase the efficiency of the financial system, and bring some small triangle welfare gains. But the key question is whether their adoption would improve macroeconomic performance. Even though Salin argues (p. 281) that ‘the best system is that which produces the least inflation’, fluctuations in output are also expensive.
  Hayek states that the adoption of his proposal would end recessions. There is absolutely no reason to believe that. Nineteenth century history is evidence that free banking and currency issue, in the wrong legal and regulatory framework, can produce rather than reduce instability. The proponents of free banking and currency issue in this volume do not go much beyond a general belief in competition in justifying their views; they have certainly not explored the necessary legal and regulatory environment in any detail.
  • Stanley Fischer, "Friedman versus Hayek on Private Money: Review Essay" (1986)

• I still think Keynesian economics is extremely important, and if anybody didn’t think so, this crisis should have made them rethink.
  • Stanley Fischer, quoted in Dylan Matthews, "Stan Fischer saved Israel’s economy. Can he save America’s?", washingtonpost.com, 2013/02/15

Quotes about Stanley Fischer

• Part of the downfall came early and on theoretical grounds, with the realization that real-world information lags for aggregate variables like the price level and money supply were much too short to rationalize the persistent multiyear deviations from equilibrium that seemed to characterize business cycles in most industrialized countries. The second dubious assumption, continuous market clearing, was viewed more critically once it was recognized that it was not an inextricable concomitant of rational expectations, especially when Stanley Fischer (1977) and Edmund Phelps and John Taylor (1977) showed that rational expectations could be embedded in a model containing real-world institutional features like multiperiod wage and price contracts to generate nonmarket-clearing behavior. Once Fischer and Phelps-Taylor had shown that rational expectations by itself was a necessary but not a sufficient condition to validate new-classical policy conclusions, the race was on to develop the new-Keynesian theory based on rational expectations and one or another institutional impediment to continuous market clearing.
  • Robert J. Gordon, "Fresh Water, Salt Water, and other Macroeconomic Elixirs." Economic Record. March 1989; pp. 177–84.