After months of rumors and speculation President Clinton nominated Public Policy Dean Edward Gramlich to the Federal Reserve board on Thursday.
The Fed, which has been dubbed the "all-star team" for economists, is responsible for establishing national fiscal operation and determining interest rates.
Gramlich, who in the 1960s was a researcher at the Fed, said he is honored to be nominated to the board and is "delighted" to return Washington, D.C..
"I'm very happy," Gramlich said. "I worked at the Fed when I was a young economist, but I never thought that I would be returning as a governor (on the board)."
If approved by the Senate, Gramlich and fellow nominee Roger Ferguson Jr., a New York securities and banking lawyer, will serve a 14-year term on the nine member board, which includes Alan Greenspan, head of the Fed, two other Clinton appointees and two Fed members appointed during past GOP administrations.
Gramlich said he is eager to tackle the tough problems that are facing the American economy.
"The most important issue is why the economy seems to be less inflationary," Gramlich said. "Even when the unemployment rate is declining, why is the economy uninflationary?"
For the past 22 years Gramlich has served as a professor of economics at the University, but he is no rookie to Washington, D.C.. Gramlich headed the federal advisory commission on Social Security finances. For a brief time in the late '80s, Gramlich was acting chief of the congressional budget offices. Also, before coming to the University, he spent three years at the Brooking's Institute, a liberal Washington, D.C., think tank.
The pressure on the board is enormous and the job, though prestigious, is extremely difficult and time consuming. In fact, the position is so exhausting that former Fed governors, including Michigan native Martha Seger, have advised Gramlich not to accept the job.
But Gramlich cannot be deterred.
"I knew what Martha thought, but I took it anyway," Gramlich said. "There will be pressure, but any job will have pressure."
School of Business Administration associate Dean Edward Snyder, who describes Gramlich as "a very constructive, pragmatic, results-oriented economist," said he is confident that he can handle the job.
"I think he can deal with it," Snyder said. "He knows his away around Washington."
Gramlich, if confirmed, will leave his post at the University. An outside search will be conducted to find his replacement, Gramlich said.
Though Gramlich's departure from the University will be a loss from the community, University faculty and staff are pleased by his success.
"I've known Ned Gramlich the entire time I've been at Michigan," said associate Vice President for University Relations Lisa Baker. "I can't think of a better choice for this very important position. He has a wonderful mind and is genuinely interested in public policy and is committed to public service."