Anna Schwartz, an economist and co-author with Milton Friedman of a book on monetary policy that shaped the views of central bankers, including Federal Reserve Chairman Ben S. Bernanke, died June 21 at her home in New York. She was 96.
Her daughter, Naomi Pasachoff, confirmed the death but did not provide a cause.
The first book Dr. Schwartz wrote with Friedman, “A Monetary History of the United States, 1867-1960,” had “critical influence” on the outlook “of a generation of policymakers,” Bernanke said in 2003, when he was a Fed governor.
Published in 1963, the book advanced the idea that the Great Depression had been triggered by the central bank’s reduction in the U.S. money supply from 1928 until the early 1930s. That contradicted the prevailing view that it resulted from the 1929 crash of the stock market.
“Nobody knew as much about the history of monetary theory and the history of monetary policy in the United States as she did,” Philadelphia Fed President Charles Plosser said.
Dr. Schwartz wrote or edited nine books on monetary policy, including three with Friedman. Friedman won the Nobel Prize in 1976 for work that included his projects with Dr. Schwartz, but her name was not included in Friedman’s Nobel commendation.
“Anna did all of the work, and I got most of the recognition,” Friedman once said, according to the New York Times.
“Anna was neglected in the citation,” said Edward Nelson, chief of the monetary studies section at the Fed in Washington, who interviewed Dr. Schwartz in 2003 for Macroeconomics Dynamics, an academic journal. Still, “the phrase ‘Friedman and Schwartz’ has become second nature in economics when discussing the importance of monetary policy.”
At a Cato Institute conference in November 2006 after Friedman’s death, Dr. Schwartz said that Friedman was “a great person to work with.”
“He could tell me I was wrong — ‘You have to rewrite,’ ” she recalled. “And I could tell him, ‘No, what you’ve written isn’t clear. You’ve got to go over it.’ It was that kind of exchange that made it possible for the ‘Monetary History’ to have such an extended life.”
Dr. Schwartz worked at the National Bureau of Economic Research into her 90s. The Cambridge, Mass.-based organization is the arbiter of U.S. recessions.
In recent years, she emerged as an outspoken critic of efforts by the Fed and Treasury to revive credit and bail out companies during the financial crisis of 2008 and to combat the recession that lasted from December 2007 until June 2009. She called the 2008 rescue of Bear Stearns a “rogue operation” and an unwise widening of the government’s safety net.
“To me, it is an open-and-shut case,” she said in a 2008 interview. “The Fed had no business intervening there.”
In an interview that same year with Barron’s, Dr. Schwartz said that the government needed to stop injecting liquidity into markets and reacting to the credit crisis with ad hoc programs.
“If I regret one thing, it’s that Milton Friedman isn’t alive to see what’s happening today,” she told the financial publication. Referring to Bernanke, she said, “It’s like the only lesson the Federal Reserve took from the Great Depression was to flood the market with liquidity. Well, it isn’t working.”
Dr. Schwartz said in a July 2009 commentary for the New York Times that Bernanke, the architect of the central bank’s emergency programs, didn’t deserve reappointment as Fed chief.
“Mr. Bernanke seems to know only two amounts: zero and trillions,” she said, referring to his policy of holding the target interest rate near zero and the expansion of the Fed’s assets to $2 trillion in July 2009, more than double the level of early 2008. The U.S. Senate’s 70 to 30 vote to approve Bernanke for a second four-year term in 2010 marked the greatest opposition to a Fed chairman since the office became subject to Senate confirmation in 1978.
Anna Jacobson was born in New York on Nov. 11, 1915, the third of five children of Hillel Jacobson and the former Pauline Shainmark, Jewish immigrants from Eastern Europe, according to a biography on the Web site of the nonprofit Jewish Women’s Archive. Her father was a manager in a kosher meat department at Swift & Co., according to the biography.
She met her husband, Isaac Schwartz, at a high school Hebrew camp. They were married from 1936 until his death in 1999. Survivors include four children.
Dr. Schwartz was a 1934 graduate of Barnard College in New York and received a master’s degree (at age 19) and then a doctorate from Columbia University. She first became interested in economics during a course in high school.
She began working at the National Bureau of Economic Research on a project on monetary data in the 1940s before Friedman became involved in 1948, Nelson said.
In collaborating with Friedman, Dr. Schwartz brought “experience in historical research, especially banking history, and her knowledge and compilation of monetary data,” Nelson said. “But when it came to the basic research and writing of the ‘Monetary History,’ there was not a division of labor between Friedman and Schwartz.”
The two economists exchanged drafts of chapters and manuscripts by mail, with Friedman working from his office at the University of Chicago and Dr. Schwartz operating from New York, where most of the statistical work was done.