Bloomberg reported: Allan Meltzer, an economist and Federal Reserve historian who was critical of the central bank’s recent policies, died on Monday at the age of 89, according to Carnegie Mellon University, where he was a professor of political economy.
A monetary policy expert who consulted with congressional committees and central banks, Meltzer brought historical perspective and a sharp knowledge of past policy foibles to his commentary. In addition to writing a multi-volume history of the Fed, he was known for a review of the international financial institutions that proposed reforms in 2000 of the World Bank and International Monetary Fund.
“Allan Meltzer was one of the greatest economists of the 20th century,” Marvin Goodfriend, a professor at Carnegie Mellon’s Tepper School of Business, said in an interview Tuesday. “His path-breaking scientific work and effective advocacy revolutionized the theory and practice of central banking, and helped end the Great Inflation in the United States and around the world in the 1980s.”
With Professor Karl Brunner of the University of Rochester, Meltzer co-founded the Shadow Open Market Committee in 1973, a group of economists that began to analyze monetary policy just as inflation started to soar in the U.S. Meltzer’s stature made him a fearless critic of Fed chairs.
In March last year, he criticized the central bank for buying housing assets during the financial crisis. The Fed currently holds $1.77 trillion of mortgage-backed securities even while housing finance is now functioning. He called the downgrading of money growth in the Fed’s economic analysis “a huge error.”