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Kristin Forbes

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Kristin Forbes
Honorary CBE
External Member of the Bank of England Monetary Policy Committee
In office
July 2014 – June 2017
GovernorMark Carney
Preceded byBen Broadbent
Succeeded bySilvana Tenreyro
Member of the White House Council of Economic Advisers
In office
May 2003 – June 2005
PresidentGeorge W. Bush
Preceded byRandall Kroszner
Succeeded byMatthew J. Slaughter
Katherine Baicker
Personal details
Born (1970-08-21) 21 August 1970 (age 54)
Concord, New Hampshire, U.S.
SpouseSteve Calhoun
Alma mater
Academic career
FieldMacroeconomics
International economics
Monetary economics
Institution
Doctoral
advisor		Rudi Dornbusch • Paul Krugman • Jaume Ventura
AwardsNSF Graduate Research Fellowship Program
Ford Foundation Fellowship
Michael Brennan Award
Information at IDEAS / RePEc

Kristin J. Forbes (born August 21, 1970)[1] is an American macroeconomist and policy adviser currently serving as the Jerome and Dorothy Lemelson Professor of Management and Global Economics at the MIT Sloan School of Management.[2] She was formerly a member of the White House Council of Economic Advisers, and an external member of the Monetary Policy Committee of the Bank of England.[2] Forbes' research focuses on international macroeconomics, monetary economics, and macroprudential policy.[2] Alongside her academic appointments, she sits on advisory boards to the Federal Reserve Bank of New York, International Monetary Fund, and Bank for International Settlements.[2] Forbes is also the convener of the Bellagio Group, as of 2020.[3]

Early life and education

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Forbes was born on August 21, 1970 in Concord, New Hampshire, the eldest of three children.[1] Her father was an orthopedist, and her mother was a stay-at-home mom.[1][4] Forbes attended Concord High School and in 1988 was selected as a Presidential Scholar, earning a trip to Washington, D.C. to meet President Ronald Reagan in the White House Rose Garden.[1][5]

After graduating from high school, Forbes enrolled at Williams College, taking first-year courses in astrophysics, economics, religion, and psychology.[1][5] She chose economics as her major, crediting Morton O. Schapiro for inspiring her interest in the subject.[5][6] She graduated summa cum laude and Phi Beta Kappa in 1992, receiving a BA in economics[1][5] and winning the David Wells prize for best undergraduate thesis.[7]

After completing her undergraduate studies, Forbes joined the investment banking division of Morgan Stanley as an analyst.[5] After one year at the bank, Dick Sabot put Forbes in touch with Nancy Birdsall at the World Bank, who hired her for a project examining the determinants of economic growth in Latin America.[5] The role inspired an interest in macroeconomics, encouraging Forbes to pursue a PhD and a career in economic policy.[5] She pursued graduate studies at the Massachusetts Institute of Technology, where her dissertation research was supervised by Paul Krugman, Rudi Dornbusch, and Jaume Ventura and was supported by the NSF Graduate Research Fellowship Program.[7] During her studies, Forbes spent three months traveling in India, and pursued research on financial contagion and the relationship between inequality and economic growth.[5] She received her PhD in 1998, winning the Robert Solow prize for excellence in research and teaching.[7]

Career

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In 1998, Forbes joined the MIT Sloan School of Management as assistant professor of economics, gaining tenure in 2004. In 2009, she became the Jerome and Dorothy Lemelson professor of management and global economics at MIT.[2] Alongside her academic appointment, Forbes is an affiliate of the National Bureau of Economic Research and Center for Economic and Policy Research, and a member of the Council on Foreign Relations.[2] She also formerly served on the editorial board of the American Economic Journal: Economic Policy.[7]

U.S. Department of Treasury and Council of Economic Advisers

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Forbes accepted her first policy position in 2001, when John B. Taylor recruited her to become Deputy Assistant Secretary of Quantitative Policy Analysis for the Latin American and Caribbean Nations at the United States Department of the Treasury.[1] Her role focused on financial stability in Latin America.[1] After returning to MIT, Forbes was recruited by Gregory Mankiw to join the Council of Economic Advisers of George W. Bush,[1] where she became the youngest person in history to hold her position.[8] As a member of the Council of Economic Advisers, Forbes focused on the economic ascendance of China, where she voiced her belief that workers in other Asian countries would be more impacted by China's rise than those in the United States. She left the CEA in 2005, returning to her academic position.[1]

Bank of England

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In 2014, UK Chancellor of the Exchequer George Osborne appointed Forbes to be an external member of the Monetary Policy Committee of the Bank of England,[9] replacing Ben Broadbent, who was promoted to Deputy Governor of Monetary Policy.[10] She became the second woman on the nine-person Monetary Policy Committee, joining Minouche Shafik, formerly of the International Monetary Fund.[9]

Facade of the Bank of England in London

At the Bank of England, Forbes became a vocal dissenter, with commentators labelling her both a monetary policy "dove" and "hawk" at different points in her tenure. In the early months of her position, Forbes advocated against interest rises, arguing that insufficient information was available on whether inflationary pressures in the UK were being masked by the strengthening of the Pound sterling, and the corresponding fall in import prices.[11] She discussed this tradeoff in her first public speech as a Monetary Policy Committee member, delivered at an event at the Canadian Imperial Bank of Commerce.

Interest rates, as set by the UK Monetary Policy Committee, 1997 to the present

In later years, Forbes would become an advocate for interest rate rises, arguing that pessimism about the state of the global economy was overstated.[12] In November 2014, she emphasized that she placed "slightly more probability on the risk that the global economy could be somewhat stronger than in our baseline forecast", a stance that placed her on the hawkish wing of the nine-member committee.[12] Despite these views, Forbes would continue to vote against rate rises at most subsequent meetings.[13] In August 2016, she joined an unanimous majority of the Monetary Policy Committee to lower rates from 0.5% to 0.25% in response to the 2016 Brexit referendum.[14]

In the months after this vote, Forbes emphasized in public statements that uncertainty created by Brexit was less of a drag on growth than was previously expected,[15] and advocated against further monetary stimulus and rate cuts.[16] In June 2017, Forbes joined Ian McCafferty and Michael Saunders to vote in favor of an interest rate increase, bringing the Bank of England closer to a rate increase than any time since 2007.[17] The 5-3 vote was a surprise to analysts, and led to a sharp increase in the value of the Pound.[17]

Forbes left the Bank of England in June 2017, returning to her post at MIT.[18] She was replaced by Silvana Tenreyro, a Professor of Economics at the London School of Economics.[19] In leaving her role, Forbes criticized the Bank of England and other central banks, arguing that the high public profile of central bankers discouraged aggressive action against inflation.[20] She also argued that an overload of work for senior economists discouraged deviations from baseline models and analysis.[20] Mark Carney, then-Governor of the Bank of England, emphasized that Forbes provided "insight, fresh-thinking and academic rigour to our [the Bank of England's] deliberations, as well as a fresh and engaging approach to communications."[18]

Research

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Alongside her policy positions, Forbes pursues research on international macroeconomics and monetary economics.[2] According to Research Papers in Economics, she is among the most productive economists in the world, ranking within the top 65 female economists by research output.[21]

References

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  1. ^ a b c d e f g h i j Barbara Hagenbaugh (June 1, 2004). "'Economics clicked' for key adviser". USA Today. Retrieved 14 May 2014.
  2. ^ a b c d e f g "Kristin J. Forbes | MIT Sloan". mitsloan.mit.edu. 2023-12-08. Retrieved 2024-01-03.
  3. ^ "Bellagio Group". bellagio.mit.edu. Retrieved 2024-11-25.
  4. ^ Caldwell, Tom (2019-09-23). "Harold James Forbes, 76". The Laconia Daily Sun. Retrieved 2024-01-03.
  5. ^ a b c d e f g h "Parallel Paths - Finance & Development, March 2017". www.imf.org. Retrieved 2024-01-03.
  6. ^ Schlegel, Martin (2024-10-07). "Martin Schlegel: Eighth Karl Brunner Distinguished Lecture - introduction of Kristin J Forbes". Bank for International Settlements.
  7. ^ a b c d "Kristin J. Forbes Resume". MIT Sloan School of Management. Retrieved 2023-01-03.
  8. ^ "Former Bush aide joins Bank of England rate-setting body". BBC News. 15 May 2014. Retrieved 15 May 2014.
  9. ^ a b "Former Bush aide joins Bank of England rate-setting body". BBC News. 2014-05-15. Retrieved 2024-01-03.
  10. ^ "Osborne Puts Another Woman On BoE Interest Rate Setting Committee". HuffPost UK. 2014-05-15. Retrieved 2024-01-03.
  11. ^ Giles, Chris (2014-10-01). "MPC's Kristin Forbes dovish on interest rate rises". Financial Times. Retrieved 2023-01-03.
  12. ^ a b Cadman, Emily (2014-11-25). "MPC's new 'hawkish dove' causes a flutter". Financial Times. Retrieved 2023-01-03.
  13. ^ Allen, Katie (2015-09-11). "Bank of England official raises prospects for early interest rate hike". The Guardian. ISSN 0261-3077. Retrieved 2024-01-03.
  14. ^ Chu, Ben (2017-02-07). "Bank of England policymaker Kristin Forbes on verge of voting for rate rise". The Independent. Retrieved 2023-01-03.
  15. ^ Milliken, David (2016-11-23). "BoE's Forbes says Brexit uncertainty less of a drag on growth". Reuters. Retrieved 2023-01-03.
  16. ^ Khan, Mehreen (2016-09-22). "BoE Forbes 'unconvinced' of need for more stimulus". Financial Times. Retrieved 2023-01-03.
  17. ^ a b Chu, Ben (2017-06-15). "Three Bank of England policymakers in shock vote for interest rate rise". The Independent. Retrieved 2023-01-03.
  18. ^ a b "Kristin Forbes to leave Bank of England Monetary Policy Committee". Belfast Telegraph. 2017-02-09. ISSN 0307-1235. Retrieved 2024-01-03.
  19. ^ Hannon, Paul; Szary, Wiktor (2017-06-19). "Bank of England Appoints LSE Professor Silvana Tenreyro to Monetary Policy Committee". Wall Street Journal. ISSN 0099-9660. Retrieved 2024-01-03.
  20. ^ a b Giles, Chris (2017-06-22). "Exiting MPC member fires salvo at central bank's decision making". Financial Times. Retrieved 2023-01-03.
  21. ^ "Top Female Economists Rankings | IDEAS/RePEc". ideas.repec.org. Retrieved 2024-01-03.
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