When Federal Reserve Chairman Ben S. Bernanke speaks about economic issues, the nation listens. But who does Bernanke listen to?
One person on the shortlist is David J. Stockton ’76 (CLAS), ’76 MA, who speaks almost daily with Bernanke in his role as chief economist for the Fed, the agency that directs the nation’s central bank, establishes national monetary policy and monitors the country’s economic health.
As director of the Federal Reserve’s Division of Research and Statistics, Stockton oversees one of the world’s largest economic research teams – approximately 290 economists, financial analysts, computer scientists, research assistants, and other personnel. Stockton and his staff sort through and interpret information streaming from the country’s financial markets each day.
One of Stockton’s primary responsibilities is presenting periodic economic forecasts to the Federal Open Market Committee (FOMC) on job losses, housing, wealth, and business spending. These reports help to determine how much you pay in interest on your credit card and how much banks may charge you for taking out a home or auto loan.
“Although I recognize that being surrounded on a daily basis by scores of economists might be viewed by most people as more of a sentence than a reward, the intellectual energy, debate, and discussions make it a very exciting place to work,” Stockton says with his trademark good humor.
“David’s wise counsel, keen insight, and deep knowledge of the economy have proved invaluable to me and the other members of the Federal Open Market Committee through the years, but most especially during the recent time of financial turmoil,” Bernanke says in an e-mail.
Stockton has served three Fed chairmen appointed by the White House, starting in 1981 with Paul A. Volcker, then Alan Greenspan, and now Bernanke. His economic forecasts are critical in helping the Federal Reserve set national public policy, although he admits that his work is, in many ways, an inexact science. Each forecast comes with a full explanation of the risks and uncertainties surrounding it.
“What economists don’t know about how the economy operates dwarfs what we do know,” Stockton says. “Our research program is intended to chip away at the margins of our ignorance.”
Stockton fondly recalls his days studying at UConn under the guidance of professors Alpha Chiang, William McEachern, William Lott, and Dennis Heffley in the Department of Economics, College of Liberal Arts and Sciences.
Although more than 30 years have passed, all of Stockton’s economics instructors remember him well. Heffley says Stockton quickly distinguished himself from his peers and seemed destined to succeed in the economics field.
“David took my graduate seminar in Urban and Regional Economics. His performance in that class still ranks as the best I’ve seen in my 36 years of teaching,” Heffley says. “It was pretty clear to all of us that David was destined for bigger things … I’ve always felt a little more comfortable about our monetary policy, simply knowing that people like David have played a key role in guiding the process.”
McEachern, who served as Stockton’s faculty advisor, remembers pushing the underclassman to take more advanced classes. Stockton rose to the challenge, succeeding in graduate-level courses with such aplomb that he was honored as a University Scholar. Stockton credits McEachern with using “patience, persistence, and humor” to encourage him to pursue a prestigious Danforth Fellowship, which ultimately funded his doctoral studies at Yale University.
The Stockton family’s public service can be traced back to the nation’s founding. Ancestor Richard Stockton of New Jersey was a signer of the Declaration of Independence. More recently, David’s father, Edward, served as mayor of Bloomfield, Conn., and as commissioner of economic development in Connecticut under both Gov. Ella T. Grasso and Gov. William A. O’Neill. In addition to David, the family’s UConn connection includes his wife, Judy (Shenkman) ’76 (ED), ’81 MA.
Stockton says the evolution of the global economy and vast improvements in computer technology have added complexity to his job over the years, while the current financial crisis has caused new challenges.
“It may take some time for a more robust recovery to take hold, as households and businesses adjust to the severe financial shock that has hit the global economy,” Stockton says. “I am confident that we will collectively make the necessary adjustments and emerge from the current difficulties with a stronger and more resilient economy.”
