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Yellen graduated as valedictorian from her public high school, then summa cum laude from Brown University with an economics degree in 1967. Four years later, she earned a Ph.D. from Yale University. At Yale, Yellen became a legend of sorts. At least her class notes did. The Yellen Notes, as they became known, served as an unofficial textbook for generations of graduate students studying economics at Yale. A mentor at Yale, the late Nobel laureate James Tobin, once said of Yellen, "She has a genius for expressing complicated arguments simply and clearly." LOVE IN THE CAFETERIA Yellen not only found career satisfaction at the Fed. She also met her future husband in the cafeteria. In 1977, she was a staff economist at the Fed in Washington and Akerlof was a visiting economist. After they married the following June, they began a long and highly successful partnership that produced numerous academic papers while both taught at Berkeley. "We liked each other immediately and decided to get married," Ackerlof wrote in essay published when he won the Nobel Prize in 2001. "Not only did our personalities mesh perfectly, but we have always been in all but perfect agreement about macroeconomics." Yellen revisited the Fed's cafeteria when she returned to Washington as one of seven Fed board members in the 1990s. She took her lunches there as a way to subvert the hierarchical system that limited contact between top Fed officials and hundreds of staff economists. "It was a real cultural shock," remembers Kevin Hassett, a staff economist at the time. "There was a serious bureaucratic divide between the political appointees and the staff. She found a way around that." CONSENSUS BUILDER Yellen's supporters say one of her main advantages over her chief rival for the Fed post, former Treasury Secretary Lawrence Summers, was this: She's been able to build consensus among the seven Fed board members and 12 regional bank presidents who meet eight times a year to set interest-rate policies. They note, for example, that Yellen moved the Fed, after years of discussion, to endorse a statement of inflation policy. In the statement, the Fed for the first time agreed in January 2012 to an inflation target of 2 percent It was something Chairman Ben Bernanke had long advocated. But it had been resisted by other officials who feared setting too rigid a goal. The statement was developed by a communication committee Yellen led. It gave equal weight to the Fed's other mandate: to foster maximum employment. Princeton economist Alan Blinder, a former Fed vice chair, said he was amazed that Yellen could forge such an agreement after years in which officials had debated the issues. "It was a testament to her ability to listen to different points of view and arrive at a consensus," Blinder said.
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