Did Ben’s To­rah lessons help to save the world?

The Jewish Chronicle - - LIFE -

the same route as two il­lus­tri­ous Jewish No­bel prize win­ners Paul Sa­muel­son (best known for his best-sell­ing eco­nomics text­book) and Robert Solow. Sa­muel­son had found Har­vard an un­wel­com­ing place for a Jewish aca­demic who wanted to take eco­nomics in a fresh math­e­mat­ics-based di­rec­tion.

MIT, with its clin­i­cal engi­neer­ing and sci­en­tific fo­cus, proved a much friend­lier en­vi­ron­ment for Jews and for bring­ing math­e­mat­i­cal dis­ci­pline to what had pre­vi­ously been re­garded as more of a hu­man­i­ties sub­ject. At MIT, Ber­nanke was to meet one of the world’s most re­spected econ­o­mists Stan Fis­cher, who went on to serve as chief econ­o­mist at the In­ter­na­tional Mon­e­tary Fund and gov­er­nor of the Bank of Is­rael and who is now back in Wash­ing­ton as deputy chair­man of the Fed­eral Re­serve.

Fis­cher in­tro­duced Ber­nanke to the work of Chicago-based econ­o­mists Mil­ton Friedman and Anna Schwartz and their clas­sic work, A Mon­e­tary History of the United States 1867-1960. Un­til then, Ber­nanke, like most econ­o­mists, re­garded Har­vard econ­o­mist John Ken­neth Gal­braith’s The Great Crash of 1929 as the au­thor­i­ta­tive work on the events of the 1930s and how spec­u­la­tion and greed on Wall Street caused the US to sink into de­pres­sion. Friedman, us­ing math­e­mat­ics and history, pre­sented a dif­fer­ent version of events.

In his view, history showed that it was the con­trac­tion of the money sup­ply — the amount of money cir­cu­lat­ing in the econ­omy — which caused the mass un­em­ploy­ment and hard­ship of Amer­ica’s Great De­pres­sion. It was a the­sis Ber­nanke de­vel­oped fur­ther in his own Dar­ing: Ben Ber­nanke re­alised that ail­ing economies needed a cash in­jec­tion

PHOTO: GETTY IM­AGES

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