Anna Schwartz, Economist Friedman’s Co-Author, Dies at 96

Anna Schwartz, Book Co-Author With Milton Friedman
Anna Schwartz, research associate at the National Bureau of Economic Research, speaks at the Cato Institute in Washington on Nov. 16, 2006. Photographer: Chris Kleponis/Bloomberg

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, has died. She was 96.

She died yesterday at her home in Manhattan after a long illness, said her daughter, Naomi Pasachoff.

The first book that Schwartz wrote with Friedman, “A Monetary History of the United States, 1867-1960,” had “critical influence” on the outlook “of a generation of policy makers,” 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 stock-market crash.

“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 yesterday in a telephone interview.

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 Schwartz.

Plosser recalled that Friedman said his work with Schwartz was “a true collaboration.” Plosser, who served as co-chairman of the Shadow Open Market Committee with Schwartz, said that while “Milton gets a lot of the credit for it, I think Anna should share in that legacy.”

Friedman Partnership

Schwartz’s name was not included in Friedman’s Nobel commendation.

“Anna was neglected in the citation,” said Edward Nelson, chief of the monetary studies section at the Fed in Washington, who interviewed 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.”

Schwartz, at a Cato Institute conference in November 2006 following Friedman’s death, said 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.”


She worked at the National Bureau of Economic Research into her 90s. The Cambridge, Massachusetts-based organization is the arbiter of U.S. recessions. On its website, her latest curriculum vitae was dated January 2010, when she was 94. She said in a 2003 interview she had no interest in retiring, because “having something to think about is a much better life.”

“Anyone who has attended a conference or a seminar with Anna knows that she was brilliant and to the point,” Christina Romer, former head of President Barack Obama’s Council of Economic Advisers, said in an e-mail. “Her comments were piercing and often devastating.”

In recent years, Schwartz 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 Cos. a “rogue operation” and an unwise widening of the government’s safety net.

Fed Criticism

“To me, it is an open and shut case,” she said in an interview in May 2008. “The Fed had no business intervening there.”

In a 2008 interview with Barron’s, Schwartz said 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 magazine. 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.”

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.

‘Two Amounts’

“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 70-30 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.

“No one was more careful in analyzing monetary data and the inter-workings of the Fed and the Treasury than Anna Schwartz,” said John Taylor, an economics professor at Stanford University in Palo Alto, California, and a Treasury undersecretary under former President George W. Bush. “Her criticism of Fed actions when policy went off track, whether in the Great Depression of the 1930s or in the past few years, was always candid and has turned out to be correct.”

Anna Jacobson was born in New York City 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 website of the nonprofit Jewish Women’s Archive. Her father was a manager in a kosher meat department at Swift & Co., according to the biography.

Marriage, Children

She met her husband, Isaac Schwartz, at a high school Hebrew camp. They were married from 1936 until his death in 1999. They had four children: Jonathan, Paula, Naomi and Joel.

A 1934 graduate of Barnard College in New York at the age of 18, Schwartz earned a master’s degree when she was 19, then a doctorate, from Columbia University. She first became interested in economics during a course in high school.

She began working at NBER on a project on monetary data in the 1940s before Friedman became involved in 1948, Nelson said.

In collaborating with Friedman, Schwartz brought “experience in historical research, especially banking history, and her knowledge and compilation of monetary data,” he 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.”

Friedman Partnership

The two economists exchanged drafts of chapters and manuscripts by mail, with Friedman working from his office at the University of Chicago and Schwartz operating from New York, where most of the statistical work was done.

“The ‘Monetary History’ was a monumental work of scholarship, and Anna gets a lot of credit for enriching the texture of the book,” said John H. Makin, an economist at the American Enterprise Institute for Public Policy Research in Washington.

Arthur Burns, who was at the NBER when Schwartz began working there in 1941, suggested pairing Schwartz and Friedman, Schwartz said in a 1993 interview published by the Minneapolis Fed. Burns later became Fed chairman.

At the NBER, Schwartz focused on banking and money, monetary policy and statistics. The nonprofit research group seeks to provide unbiased economic analysis for policy makers, business people and academics. Its Business Cycle Dating Committee determines when U.S. recessions begin and end.

Sixteen of the 31 American Nobel Prize winners in economics and six of the past chairmen of the President’s Council of Economic Advisers have been researchers at the NBER, the group said on its website in August 2010.

“Anna is a symbol of the NBER,” Harvard University economist Martin Feldstein, a retired president of the group, said at a dinner honoring her in 2000.

“The style of Anna’s work over many years at the NBER is something that we aspire to as an organization but rarely achieve,” he said. “It’s careful, serious, empirical research.”

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