Stanley Fischer

Background

Stanley Fischer, whose Hebrew name was Shlomo Ben Pesach Hacohen, was born into a Jewish family in Lusaka, Northern Rhodesia (now Zambia), on October 15, 1943. When he was 13, his family moved to Southern Rhodesia (now Zimbabwe), where he became an active member of Habonim, a Labor Zionist youth movement. In 1960, he visited Israel as part of a winter program for youth leaders, and studied Hebrew at kibbutz Ma'agan Michael.

Fischer initially intended to study chemistry at the Hebrew University of Jerusalem, but was drawn to economics after being introduced to the work of Paul Samuelson at the Massachusetts Institute of Technology and reading The General Theory of Employment, Interest, and Money by John Maynard Keynes. He accepted a scholarship to attend the London School of Economics in England, where he received B.Sc. and M.Sc. degrees in economics between 1962 and 1966. He received a Ph.D. in 1969 with a dissertation titled Essays on Assets and Contingent Commodities, which addressed general equilibrium theory under uncertainty. He became a naturalized United States citizen in 1976.

In 1965, Fischer married Rhoda Keet, whom he met during his days in Habonim; the couple had three children. When they moved to Israel, Rhoda became honorary president of Aleh Negev, a rehabilitation village for the disabled. Rhoda Fischer died in 2020.

Fischer died from Alzheimer's disease at his home in Lexington, Massachusetts, on May 31, 2025, at age 81.

Academic career

Fischer began his academic career at the University of Chicago faculty, serving as an assistant professor from 1970 to 1973. He returned to MIT in 1973, where he stayed for the remainder of his academic career. He held the Elizabeth and James Killian Class of 1926 Professorship from 1992 to 1995 and served as department chair in 1993–94, before working at the IMF.

Many of Fischer's students at MIT went on to prominent roles in global economic policy, including Federal Reserve chairman Ben Bernanke, European Central Bank president Mario Draghi, Inter-American Development Bank president Ilan Goldfajn, Reserve Bank of Australia governor Philip Lowe, and Bank of Japan governor Kazuo Ueda. Others, such as Greg Mankiw and Christina Romer, chaired the Council of Economic Advisers, while Maurice Obstfeld, Kenneth Rogoff, and Frederic Mishkin held senior positions at the International Monetary Fund and the Federal Reserve.

In 1977, Fischer published the paper Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule, which reconciled the concept of rational expectations—developed by new classical economists such as Robert Lucas—with the phenomena of price stickiness and observed this fusion creates certain market imperfections and advocated for active monetary policy to mitigate economic downturns. Through this critique of new classical macroeconomics, Fischer contributed significantly to clarifying the limits of the policy-ineffectiveness proposition. Fischer's analysis contributed to the foundation of New Keynesian economics.

He authored three popular economics textbooks, Macroeconomics (with Rüdiger Dornbusch), Lectures on Macroeconomics (with Olivier Blanchard), and the introductory Economics, with David Begg and Rüdiger Dornbusch.

In 2012, Fischer served as Humanitas Visiting Professor in Economic Thought at the University of Oxford.

Public policy and banking career

From January 1988 to August 1990 he served as Chief Economist of the World Bank. He was then appointed First Deputy Managing Director of the International Monetary Fund, and served in that role from September 1994 to August 2001. By the end of 2001, Fischer had joined the Group of Thirty, an influential Washington D.C.-based financial advisory body. From February 2002 to April 2005, after leaving the IMF, he was an executive at Citigroup, where he served as Vice Chairman, President of Citigroup International, and Head of the Public Sector Client Group.

Bank of Israel

Fischer was appointed Governor of the Bank of Israel in January 2005 by the Israeli cabinet, after being recommended by Prime Minister Ariel Sharon and Finance Minister Benjamin Netanyahu. He had been involved in the past with the Bank of Israel; he had helped implement Israel's 1985 Economic Stabilization Plan as a U.S. government adviser. He took the position on May 1, 2005, replacing David Klein (who ended his term on January 16, 2005), and was sworn in for a second term on May 2, 2010. Fischer became an Israeli citizen, but did not renounce his U.S. citizenship.

Under his management, in 2010, the Bank of Israel was ranked first among central banks for its efficient functioning, according to IMD's World Competitiveness Yearbook.

Fischer was widely praised for his handling of the Israeli economy during the 2008 financial crisis. In September 2009, the Bank of Israel was the first bank in the developed world to raise interest rates. In 2009, 2010, 2011, and 2012 Fischer received an "A" rating on the Central Banker Report Card published by Global Finance magazine.

In June 2011, Fischer applied for the post of IMF managing director to replace Dominique Strauss-Kahn, but was barred, as the IMF stipulates that a new managing director must be no older than 65, and he was 67 at the time.

On June 30, 2013, Fischer stepped down as Governor of the Bank of Israel halfway through his second term, despite high popularity.

U.S. Federal Reserve

American President Barack Obama nominated Fischer to the position of Vice Chair of the Federal Reserve, the United States' central bank, in January 2014. In nominating Fischer for the position, Obama stated he brought "decades of leadership and expertise from various roles, including serving at the International Monetary Fund and the Bank of Israel."

On May 21, 2014, the Senate confirmed Fischer's appointment to the Federal Reserve Board of Governors. In a separate vote on June 12, he was confirmed as the vice chair.

Awards and recognition

Fischer received an honorary doctorate from the Hebrew University of Jerusalem in 2006. In October 2010, Fischer was declared Central Bank Governor of the Year by Euromoney magazine. He was the winner of Central Bankings Lifetime Achievement Award in 2022.

He was a member of the Bilderberg Group and attended its conferences in 1996, 1998, and 1999. He also appears to have attended the Bilderberg Group's conference in 2011 in St. Moritz, Switzerland, though (as of March 2016) his name does not show up on the list of participants for the year 2011. He was a Distinguished Fellow of the Council on Foreign Relations. Fischer was named a Distinguished Fellow of the American Economic Association in 2013. He was also a member of the Inter-American Dialogue.

References

References

1. Fisher, Stanley. (1969). "Essays on assets and contingent commodities". [[MIT]].
2. Bodie, Zvi. (1975). "Hedging against inflation". [[MIT]].
3. Ahluwalia, Isher Judge. (1976). "A macro-econometric model of the Indian economy analyzing inflation during 1951-1973". [[MIT]].
4. Mishkin, Frederic Stanley. (1976). "Illiquidity, the demand for consumer durables, and monetary policy". [[MIT]].
5. Sheffrin, Steven M.. (1976). "Rational expectations and employment fluctuations". [[MIT]].
6. Blanchard, Olivier. (1977). "Two essays on economic fluctuations". [[MIT]].
7. Bernanke, Ben. (1979). "Long-term commitments, dynamic optimization, and the business cycle". [[Massachusetts Institute of Technology]].
8. Ueda, Kazuo. (1980). "Dynamic Interactions Between Trade Flows and Exchange rates". [[MIT]].
9. Hsieh, David Arthur. (1981). "Expectations and efficiencies in international markets". [[MIT]].
10. West, Kenneth D.. (1983). "Inventory models and backlog costs : an empirical investigation". [[MIT]].
11. (September 19, 2016). "A Profile of Stanley Fischer". GREG MANKIW'S BLOG.
12. Miron, Jeffrey Alan. (1984). "The economics of seasonal time series". [[MIT]].
13. Bils, Mark. (1985). "Essays on the cyclical behavior of cost and price". [[MIT]].
14. Romer, David. (1985). "General equilibrium analysis of government financial policies". [[MIT]].
15. Caballero, Ricardo J.. (1988). "The Stochastic Behavior of Consumption and Savings". [[MIT]].
16. "Michael Kuehlwein".
17. Sheets, D. Nathan. (1993). "Essays in intersectoral economics: exchange rates, public capital and productivity". [[MIT]].
18. Goldfajn, Ilan. (1995). "On public debt and exchange rates". [[MIT]].
19. [http://www.smh.com.au/business/world-business/stanley-fischer-firms-as-top-choice-to-become-us-fed-vice-20131212-2z75m.html Stanley Fischer firms as top choice to become US Fed vice], [[The Sydney Morning Herald]], via [[Bloomberg News]], December 12, 2013.
20. Ewing, Jack. (June 12, 2011). "Bank of Israel Chief Enters Race to Lead I.M.F". The New York Times.
21. "Stanley Fischer submits resignation as a member of the Board of Governors, effective on or around October 13, 2017". Board of Governors of the Federal Reserve System.
22. (February 13, 2019). "Former Fed vice-chair Stanley Fischer to join BlackRock". Financial Times.
23. Cohen, Nitzan. (June 1, 2025). "Former Bank of Israel governor Stanley Fischer dies at 81".
24. Hagerty, James R.. (June 1, 2025). "Stanley Fischer, Who Helped Defuse Financial Crises, Dies at 81". [[The New York Times]].
25. Rappeport, Alan. (February 15, 2013). "Stan Fischer Saved Israel's Economy. Can He Save America's?". The Washington Post.
26. (March 7, 2016). "Remarks by Vice Chairman Stanley Fischer".
27. {{MathGenealogy
28. (June 3, 2025). "Stanley Fischer, towering figure in economics, dies at 80". MIT News.
29. Stanley Fischer (1977) [https://www.jstor.org/stable/1828335?origin=JSTOR-pdf Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule] [[Journal of Political Economy]].
30. Galbács, Peter. (2015). "The Theory of New Classical Macroeconomics. A Positive Critique". Springer.
31. Binyamim Appelbaum (December 12, 2013). "[https://economix.blogs.nytimes.com/2013/12/12/young-stanley-fischer-and-the-keynesian-counterrevolution/ Young Stanley Fischer and the Keynesian Counterrevolution] ''New York Times''. Retrieved December 15, 2014
32. Dylan Matthews (January 13, 2014) [https://www.washingtonpost.com/blogs/wonkblog/wp/2014/01/13/stanley-fischer-saved-israel-from-the-great-recession-now-janet-yellen-wants-him-to-help-save-the-u-s/ Stanley Fischer saved Israel from the Great Recession. Now Janet Yellen wants him to help save the U.S.]". ''The Washington Post''. Retrieved January 15, 2014
33. [http://www.strategicdialogue.org/events/items/humanitas-economic-fischer "Humanitas Visiting Professorship in Economic Thought"] {{webarchive. link. (May 12, 2013 , Institute for Strategic Thought, University of Oxford, November 5–6, 2012.)
34. [https://www.nytimes.com/2014/03/13/business/economy/stanley-fischer-fed-nominee-has-long-history-of-policy-leadership.html "Stanley Fischer, Fed Nominee, Has Long History of Policy Leadership"], New York Times, March 12, 2014.
35. Filut, Adrian. (May 2, 2010). "Stanley Fischer sworn in for second term". Globes.
36. Mitnick, Joshua. (June 13, 2011). "Israel's Stanley Fischer Announces Bid to Head the IMF". Wall Street Journal.
37. Odenheimer, Alisa. (June 12, 2011). "Fischer's Age, Nationality Are Hurdles in Bid for IMF Post". Bloomberg News.
38. Klein, Zeev. (January 19, 2005). "Bach c'tee approves Fischer". [[Globes (newspaper).
39. Viniar, Olga. (May 20, 2010). "Israel's economy most durable in face of crises". Ynetnews.
40. (August 25, 2009). "Israel central bank first in developed world to raise interest". [[Haaretz]].
41. (September 28, 2010). "World's Top Central Bankers 2009". [[Global Finance (magazine).
42. (September 9, 2010). "Global Finance Magazine names the World's Top Central Bankers 2010". Global Finance.
43. Wroughton, Lesley. (June 13, 2011). "Lagarde, Carstens shortlisted for IMF race-officials". [[Reuters]].
44. (January 29, 2013). "Stanley Fischer to step down as BOI chief". Ynetnews.
45. Dylan Matthews. (February 15, 2013). "Stan Fischer saved Israel's economy. Can he save America's?". The Washington Post.
46. "Obama Nominates Former Bank of Israel Chief Stanley Fischer as Fed Vice Chairman". Ha'aretz.
47. (June 12, 2014). "Senate confirms Brainard, Powell for Fed seats, Fischer as vice chair". The Los Angeles Times.
48. (December 21, 2017). "Larry Lindsey being considered for Fed vice chair job: Sources". CNBC.
49. (September 6, 2017). "Stanley Fischer Quits No. 2 Post At Federal Reserve". Forward Magazine.
50. "Stanley Fischer: The Israeli economy". bis.org.
51. (October 2010). "Central bank governor of the year 2010: Stanley Fischer's bold moves show the value of experience". Euromoney.
52. [https://www.centralbanking.com/awards/7943021/lifetime-achievement-award-stanley-fischer Lifetime Achievement Award]
53. "Bilderberg 2011 list of participants". BilderbergMeetings.org.
54. "Inter-American Dialogue {{!}} Experts".