(Reuters) - Thomas Laubach, the head of the Fed division overseeing monetary policy, died on Wednesday of pancreatic cancer at age 55, just days after the release of a new central bank strategy whose development he helped spearhead.
“I will miss Thomas as both a colleague and a friend,” Fed Chair Jerome Powell said in a statement released by the central bank. “He was a world-class economist, committed to public service and universally respected for his significant contributions to the theory and practice of monetary policy. His expertise, intellect, and good judgment were peerless.”
In a career that began with a research job at the Kansas City Fed and included research stints at the European Central Bank and Germany’s Bundesbank, Laubach contributed to groundbreaking research on concepts like the natural rate of interest which neither encourages or discourages economic activity.
His method for estimating the natural rate, developed with current New York Fed President John Williams, is now considered a benchmark often referred to in deliberations over monetary policy.
He was appointed to run the Fed’s monetary affairs division in 2015 by then Chair Janet Yellen.
In that role he led the staff work behind the new strategy the Fed introduced last week to try to encourage higher employment - an effort that included a deep research agenda to guide debate among policymakers about how the economy had changed and how the central bank should respond to those changes.
Laubach received his Phd in economics from Princeton University in 1997, with former Fed Chair Ben Bernanke as his thesis adviser.
Reporting by Howard Schneider; Editing by Christopher Cushing
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