Arthur F. Burns served two consecutive terms as chairman of the Board of Governors of the Federal Reserve System, between January 31, 1970, and March 8, 1978.
Burns was born in 1904, in Stanislau, Austria, and immigrated to the United States at age ten. Burns received his bachelor’s, master’s and doctoral degrees from Columbia University. After completing his doctorate, he taught at Rutgers University for more than a decade before returning to his alma mater to teach in 1941.
Throughout his teaching career, Burns also served as president and chairman of the National Bureau of Economic Research. He later served as chairman of the President’s Council of Economic Advisers and was a member of the President’s Advisory Committee on Labor Management Policy. He was counselor to the president before becoming chairman of the Board of Governors.
Burns assumed leadership of the Federal Reserve during the middle of what would later become known as the Great Inflation (1965–82). In short, easy monetary policy during this period helped spur a surge in inflation and inflation expectations. When inflation began to rise, policymakers (in retrospect) responded too slowly, leading to a recession. Inflation was exacerbated by several adverse economic factors during the decade: the administration’s wage-price control program that artificially held down inflation, oil and food price shocks, and government fiscal policies that stretched economic capacities. As Burns later reflected, “In a rapidly changing world the opportunities for making mistakes are legion.” 1
After leaving the Board of Governors, Burns became distinguished scholar in residence at the American Enterprise Institute. He also taught part-time at Georgetown University and continued lecturing around the country on economic policy.
Burns also continued his public service. In 1979, he joined the bipartisan Committee to Fight Inflation (made up of former Treasury secretaries, Fed chairmen, and others). In 1980, he chaired President Ronald Reagan’s Task Force on International Monetary Policy. Later, President Reagan chose him as ambassador to Germany.
Over the years, Burns published extensively in the economics field, with emphasis on the management of business cycles. He authored The Frontiers of Economic Knowledge: Essays as well as Reflections of an Economic Policymaker.
Burns died in 1987.
“The Anguish of Central Banking,” Federal Reserve Bulletin, September 1987, p. 693.
Written by the Board of Governors of the Federal Reserve System. See disclaimer.