We are encouraged that the Trump administration has announced the nomination of Professor Marvin Goodfriend to the Board of Governors of the Federal Reserve. Mr. Goodfriend’s rigorous scholarly background, his deep understanding of monetary policy, and his extensive experience with the Federal Reserve and global central banks make him a superb nominee, and he would be a valuable addition to the Board of Governors.
Mr. Goodfriend is the Friends of Allan Meltzer Professor of Economics at Carnegie Mellon’s Tepper School of Business. His career has focused on the history and workings of the Federal Reserve and other leading central banks. He previously served as the director of research and policy advisor at the Federal Reserve Bank of Richmond from 1993 to 2005, attending meetings of the Federal Open Market Committee during his tenure. He was also a visiting economist at the Federal Reserve Board in 1982-1983. He has been a visiting scholar at the Bank of Japan, the European Central Bank, and the Federal Reserve Banks of Atlanta, Cleveland, Kansas City, and New York.
It would be hard to find someone with greater experience in the affairs of central banking than Marvin Goodfriend. Goodfriend’s deep academic training and policy experience make him an ideal complement to the Fed team that will be led by Chairman-elect Powell and Vice Chairman Quarles. His research on an array of monetary policy issues is influential, and he is highly regarded in the Federal Reserve.
Mr. Goodfriend is a member of the Shadow Open Market Committee, founded by University of Rochester Professor Karl Brunner and Carnegie Mellon Professor Allan Meltzer. His scholarly approach to monetary policy is further reflected in his role on the editorial boards of the Journal of Money, Credit and Banking, the International Journal of Central Banking, and the Journal of Monetary Economics.
Goodfriend’s recent stands on important monetary policy issues show a balanced approach that should be attractive to both sides of the aisle. On the one hand, he is a supporter of proposals to make monetary policy more systematic, testifying before the House Financial Services Committee this year about the importance of a credible commitment to price stability. In his writing and testimony, he has warned that failing to maintain the credibility of the target reduces the capacity of monetary policy to stabilize employment and inflation, and increases household financial insecurity. At the same time, he does not support rigid, formulaic rules that would bind the Fed, given his understanding of the need to tailor monetary policy frameworks to evolving conditions.
Goodfriend can neither be described as a hawk or a dove. During times of accelerating inflation, he recognized the value of fighting inflation with contractionary monetary policy. But recently, in recognition of the persistence of inflation rates below two percent, he has suggested that the Fed should avoid raising rates too quickly.
Throughout his career, Mr. Goodfriend has shown himself to be a dedicated and original thinker interested in examining the most pertinent questions of monetary policy, providing valuable insight and analysis on a range of important topics. He would be a superb addition to the Federal Reserve’s Board of Governors.
Charles W. Calomiris is Henry Kaufman Professor of Financial Institutions at Columbia Business School and Co-Director of the Hoover Institution’s Program on Regulation and the Rule of Law. Mickey Levy is Chief Economist for the Americas and Asia, Berenberg Capital Markets, LLC. Both are members of the Shadow Open Market Committee.