What it is:
How it works/Example:
Alan Greenspan was born in 1926 in New York. His father was a stockbroker and his mother was a salesperson. He was a math prodigy but attended The Julliard School after high school. He went on to earn both a bachelor's and master's degrees in economics from NYU; he then entered the doctorate program at Columbia.
Greenspan left Columbia to become a professional economist at the National Industrial Conference Board (NICB). After the NICB, Greenspan and bond trader William Townsend started an economic consulting company. He became President Nixon's director of policy research in the 1960s, then became chairman of the Council of Economic Advisors during the Ford administration. He completed his Ph.D. in 1977.
Greenspan served as the chairman of the Social Security Administration in the early 1980s, and then was appointed chairman of the Federal Reserve Board (FRB) Reagan. Greenspan remained chairman of the Federal Reserve during the George H. W. Bush, Clinton, and George W. Bush administrations. He was the first chairman to serve five consecutive terms.
Why it matters:
Greenspan is perhaps the most well-known and influential Fed chairman in American history. He was known for his carefully worded speeches that could send the financial markets reeling within minutes of their delivery, and he is also credited with slashing interest rates in order to prop up the economy after the crash of 1987 and after the bursting of the dot-com bubble in 2001.