I’m a former student of Janet Yellen. Here’s what makes her approach to economics so brilliant

November 2, 2022, 10:35 AM UTC
Updated November 2, 2022, 5:15 PM UTC
U.S. Treasury Secretary Janet Yellen
Treasury Secretary Janet Yellen at the IMF and World Bank meetings, Oct. 14, 2022, in Washington, D.C.
Drew Angerer—Getty Images

Good morning.

One of the most unusual experiences of my academic years was sitting in a large lecture room at the London School of Economics with roughly 100 students from all over the world and listening to weekly lectures on macroeconomics from a pair of newlyweds: future Nobel laureate George Akerlof and his bride, Janet Yellen. Akerlof’s morning lectures were always—at least I assumed—brilliant, but often baffling. Yellen would arrive in the afternoon and soothe our hurting brains with lectures that made the most convoluted theories of Akerlof and other economists comprehensible.

What I never imagined in those days was that Yellen would become the first woman to chair the Federal Reserve and then go on to be the first woman to serve as Treasury Secretary. But in retrospect, it makes perfect sense. Her brilliance was the ability to explain the most complicated economic subjects in a way that slow-witted students—as well as politicians and policymakers—could grasp. 

Yellen’s story is captured in a new book out this week from my former colleague Jon Hilsenrath. I recommend it, not just as a treatise on economic policy, but as the portrait of an extraordinary woman and an extraordinary relationship. Yellen never again “team taught” with Akerlof. But in Hilsenrath’s telling, the two have had a lifelong creative cross-fertilization of ideas—a tight intellectual circle that later expanded to include their son, Robert—that ultimately provided enormous benefits to the country and the world. As Hilsenrath puts it:

“Yellen was motivated, more than anything, by an almost obsessive desire to examine questions fully and get as close as she could to answers that stood up to thorough and honest analysis. She adapted as circumstances changed and updated her beliefs when they fell apart under serious scrutiny…Yellen saw in her work a duty to contribute to some larger purpose, like a lighthouse keeper watching the shoreline. She didn’t set out to break gender barriers or win top jobs. When she leaned into debates, it wasn’t to be heard over anyone. It was usually because she thought her arguments were right, and she had the conviction and the knowledge to defend them.”

Yellen’s story remains unfinished. The policies she championed certainly helped boost the economy, but they also fed inflation. The costs of combating that inflation will have to be factored into her legacy. In any event, her role in the making of modern economic policy has been hugely consequential.

A final note: One of the interesting revelations in Hilsenrath’s book is that Yellen has maintained a continuous and productive dialogue with her rival for the Fed job—and her sometime critic—Larry Summers (who will be speaking tomorrow at the Fortune CEO Initiative). If more in Washington could embrace the virtues of civil dialogue despite personal and policy disagreements, the nation would be better off.

More news below. And check out the interview Ellen McGirt and I did with Progressive CEO Tricia Griffith on our Leadership Next podcast, available on Apple or Spotify.

Alan Murray



Twitter review

The U.S. Treasury Department is reportedly considering a probe of Elon Musk’s now-closed Twitter takeover, on the basis that he has ties to foreign governments and investors. According to WaPo, the terms of the Twitter deal would give large foreign investors access to “confidential information about Twitter’s finances—and potentially its users.” Washington Post

Election results

As the U.S. gears up for midterms, election news has been pouring in from the rest of the world. Brazil: Jair Bolsonaro still hasn’t conceded his loss, but has signaled he will cooperate with the transition of power to leftist rival Lula. Denmark: Incumbent Prime Minister Mette Frederiksen won enough seats in a general election to form a new administration. Israel: In the country’s 10 millionth (okay, fifth) election since 2019, former PM Benjamin Netanyahu appears set to return, though ballots are still being counted.

Netflix with ads

Netflix will this week roll out its “Basic With Ads” service in a dozen countries, with the U.S. launch coming tomorrow. Advertisers are in, but Netflix has yet to finalize revised licensing deals with a host of studios to allow it to place ads against their content. Wall Street Journal


‘Taking kickbacks, inflating invoices, stealing parts’: Former Apple employee pleads guilty to scamming tech giant out of $17 million, by the Associated Press

Here are some top contenders Elon Musk could choose to be Twitter’s new CEO, by Kylie Robison

‘We cannot be reliant in the future on people like Putin’: EU ambassador holds strong on support for Ukraine despite energy crisis, by Tristan Bove

The last American venture capitalist in Beijing: Here are the strategic miscalculations undermining America’s technology competition with China, by Ben Harburg

How to take back our identities in a Web3 world, by Don Tapscott

This edition of CEO Daily was edited by David Meyer. 

This is the web version of CEO Daily, a newsletter of must-read insights from Fortune CEO Alan Murray. Sign up to get it delivered free to your inbox.

Read More

CEO DailyCFO DailyBroadsheetData SheetTerm Sheet