- [Christina Romer] She tries to dot every i and cross every t
because she realizes how big the stakes are.
- [Narrator] Economists.
Not a group with a lot of Marys, Natashas, or Juanitas,
and that's caused a lot of controversy.
However, what's often overlooked are the actual female economists
who are pushing economics forward
by addressing real-world issues.
Welcome to "Women in Economics."
Meet Janet Yellen,
the first woman to be Chair of the Federal Reserve
and definitely the first Chair to have devoted fangirls.
But her gender isn't the only thing
that sets her apart.
According to her predecessor,
- [Ben Bernanke] She had practically more experience
as a Federal Reserve policymaker
than almost any other Chairman.
- [Narrator] But you don't just become the Fed Chair overnight.
So how did she get here?
As with most stories,
we have to go back to the beginning.
In 1946, Yellen was born
into a still recovering Brooklyn economy
previously rattled by the Great Depression.
Her father was a doctor,
and she grew up hearing how many of his patients lost jobs
in the tragic economic downturn.
- [Janet Yellen] I came to understand
that when someone loses a job
it gives rise to financial problems
and really affects family life.
- [Narrator] After graduating from high school,
she found herself at Brown University.
When deciding what to major in, she discovered economics
and how it could be used to help others.
- I learned about Keynesian economics in college,
and that was an aha experience to me.
- [Narrator] Keynesian economics asserts that market failures
and other forces cause an economy to deviate from its potential
and that government can take actions
to stabilize the economy, to reduce its busts and booms.
- I understood there was a framework that was important
for thinking about what caused unemployment
and what could be done.
- [Narrator] After Brown, in 1971, Yellen completed her PhD
at Yale University,
with Nobel Laureate James Tobin as her advisor.
She was inspired by Tobin's use of economic data
to explain income inequality.
When Yellen enrolled at Yale,
she was only one of two women
in a class of two dozen economists.
She then found the number of women in economics careers
wasn't any larger, beginning with her time at Harvard.
- [Janet Yellen] I was an assistant professor at Harvard.
I was the only woman on the faculty at the time.
I realized that an absence of role models
made a difference to my life.
- [Narrator] Despite this challenge,
Janet Yellen wrote a paper proposing the now classic idea
that selling two products together,
instead of separately, known as "commodity bundling,"
is a type of price discrimination.
Think season tickets versus individual tickets
to a sporting event.
After five years, she left Harvard
for the first of many positions at the Federal Reserve.
- [Janet Yellen] I was always interested
in serving in a policy role.
I think of economics as a practical discipline
that has the potential to make policy better.
- [Narrator] Here, she met another economist,
future Nobel Laureate George Akerlof.
They married within months of meeting each other.
When you know, you know.
Yellen and Akerlof's collaboration
was not restricted to their family life.
They also had a very prolific research partnership.
- When they were working on a topic,
they wanted to talk about it all the time.
They were thinking about it all the time.
The two of them would get in a room
and they could just talk for hours or days
because they were so excited
and so engrossed in the research project.
- [Narrator] After the Federal Reserve,
they moved to the London School of Economics,
and eventually settled as faculty at UC Berkeley,
which was their home for many years.
Here, she became a role model and mentor
to younger female economists.
- I've learned so much.
I think one of the things
that was the most important for my life was to realize
that you could be a very successful economist,
you could do public policy,
and you could still be a really great mom.
- [Narrator] This was a period
in which Yellen and her collaborators
made groundbreaking contributions to macroeconomics.
Much of her work extended and promoted
the new Keynesian economic school of thought,
and her impact on economics,
including research on labor economics,
industrial organization, trade, monetary policy,
and business cycles, has been remarkable.
Even if she had never entered a Federal Reserve bank,
her influence on economics would still be far-reaching.
Yellen bounced back to policy.
She continued to climb the ladder in the Federal Reserve System
and also served as President Bill Clinton's
Chair of his council of economic advisors.
When the Great Recession hit,
in 2007, she was President
of the San Francisco Federal Reserve Bank.
- Janet was one of the early voices
realizing how serious the problem was
and how important it was
to have a very strong policy response.
- [Ben Bernanke] She made a point of talking to bankers,
to businesspeople, to community leaders,
to try to get a sense
of what was happening in the economy.
And I remember, when the crisis hit, she was letting us know
from her communication in the San Francisco area
that this was a very, very serious matter --
it needed a strong response.
- [Janet Yellen] The Fed recognized
if the financial system collapsed,
the ultimate victims would be households and businesses
throughout the economy.
- [Narrator] She became Vice-Chair of the Federal Reserve
under Chairman Ben Bernanke to help ease the recession.
- Well, it was a terrifying time.
We saw how devastating the consequences were
for all Americans.
We were motivated to put aside our personal lives
throughout the crisis, to be available 24/7,
to do absolutely everything that we could
to promote recovery.
- [Narrator] And this brings us back to the Fed Chair.
On February 3rd, 2014, Yellen was sworn in
as the first female Chief of the Federal Reserve
in its more than 100-year history.
She took over during uncertain times.
The Fed had implemented some unusual tools
during the Great Recession.
Now that the worst had passed,
she had to begin unwinding these policies.
- Janet provided really important leadership
at a critical time.
It was a tricky transition.
It needed careful, thoughtful leadership,
and Janet provided that.
- Sometimes, when people look at her tenure as Fed Chair,
you say not much happened.
Well, you don't realize what a giant accomplishment that was.
There was such a chance for many bad things to happen,
and the fact that they didn't is precisely because
we had that steady hand
who was making sure the press, the markets,
everybody knew what was happening.
- [Narrator] Yellen left her role of Fed Chair in 2017,
after four years of service.
Her contributions to policy are far from finished.
She continues to work
at the intersection of academia and policy
as a distinguished fellow at the Brookings Institution.
- I think it's important to find something you love,
that makes you want to get up in the morning,
go to work.
I've been fortunate to have experienced that
throughout my career,
both in research and teaching, and policy,
where I've had the privilege of working with wonderful people
who are committed to public service,
have high integrity
when they're trying to craft
the best possible policies that they can.
- [Narrator] Want to better understand Yellen and macroeconomics?
Click here for related materials and practice questions.
Or, check out other videos
on how economists are tackling real-world problems
such as the environment, poverty, and unemployment.
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