Published June 1, 2005 | June 2005 issue
In April 2005, E. Gerald Corrigan, former president of the Minneapolis Fed and the New York Fed, and Neil Wallace, long-time economics adviser to the Minneapolis Fed, were selected as Fellows of the American Academy of Arts and Sciences, an honor bestowed on "individuals who have made preeminent contributions to their discipline and to society at large."
E. Gerald Corrigan headed the Minneapolis Fed from August 1980 until December 1984, when he became president of the New York Fed through July 1993. At Minneapolis, Corrigan helped develop Fed policy on pricing for bank services—policy that resonates 20 years later. He was also a powerful proponent of the idea that banks have special traits and roles that require their strong separation from commerce, a principle he advocated later on in debates surrounding the Gramm-Leach-Bliley Act of 1999.
While at the New York Fed, Corrigan was instrumental in restoring financial stability in the face of the 1987 stock market crash and other financial crises, but he took greater pride, he said at the time, in his efforts to improve "the plumbing" of the nation's financial system. Now a partner and managing director at Goldman, Sachs and Co., Corrigan remains a prominent figure in international finance. As Gary Stern noted back in 1988, "He has a lot of influence, and his opinions may count a bit more than some others' because e has been around so long and fought so many wars."
See the 1990 Region interview with Corrigan.
A pioneer in monetary economics, Neil Wallace has generated remarkable insights into the behavior of money and the proper purpose of monetary policy. In the 1970s, while at the University of Minnesota, Wallace joined a special studies group at the Minneapolis Fed with John Kareken, Thomas Muench and Thomas Sargent that helped to elaborate the full implications of Robert Lucas' theory of rational expectations. Wallace's later research on currency and banking presaged important theoretical and policy debates over exchange rates and deposit insurance. At Pennsylvania State University since 1997, Wallace continues his pathbreaking work on the complex role that money plays in a modern economy.
"It's a true pleasure to see Neil receiving some small measure of the recognition he deserves," observes Minneapolis Fed adviser Ed Prescott, 2004 Nobel laureate in economics and also an Academy Fellow. "He's an inspiration to everyone in economics."
See examples of Wallace's work while at the Fed (comprising more than 50 articles and essays).