Alan Greenspan is one of the most notable and well known economists of the last century, due to his position as Chairman of the Federal Reserve during the dotcom bubble as well as his pre Great recession forecasts. Besides his role as the Chairman of the Fed, Greenspan has held many other roles, both in an advisory capacity to many large banks and funds, as well as owning his own consulting firm, Greenspan Associates, LLC.
After his appointment to the Fed in 1987, Greenspan had to navigate multiple recessions and crises, notably the stock market crash of October 1987, the Asian financial crisis of 1997, the dotcom bubble burst of 2000, and the terrorist attacks of September 11th, 2001. The policies Greenspan implemented helped lead the US to what was at the time the longest expansionary period in history - this was during the 1990s. After acting quickly and ensuring liquidity in the markets during the crash of 1987, Greenspan’s policies of anti-inflation and price control allowed the US economy to expand for a decade, before the dotcom bubble burst. As is the theme with all central bankers, their policies fall under discretionary monetary policy as opposed to rules based policy.
Once Greenspan left his position in 2006, he began his own consulting firm, and most notably forecast the recession of 2008 in 2007. After his forecast, he was hired in an advisory capacity by Deutsche Bank and hedge fund Paulson & Co. The recession, caused largely in part by the housing market and the collapse of the subprime mortgage market, has been in part blamed on Greenspan due to his economic policies implemented during the early and mid 2000s. Despite Greenspan’s work to help the US economy expand so dramatically, he has a controversial legacy due to some of the errors made during his tenure, particularly in the early 2000s. Greenspan cut interest rates to almost unprecedented levels in the early 2000s, which combined with his endorsement of adjustable rate mortgages, make him a polarizing figure to those who lost money in the recession.