Professor Jeremy Stein to Serve Obama in DC

Professor Jeremy Stein, the Moise Y. Safra Professor of Economics, will serve in the Obama administration working for Lawrence H. Summers on the National Economic Council. Stein, whose research has focused on subjects such as behavioral finance and stock market efficiency, will be joining Summers (director of the National Economics Council), and a handful of other Harvard professors in the Obama administration.

Stein told the Wall Steet Journal in October of 2008 that he believed the banks should suspend all dividend payments.  He has advocated for agressive government audit of banks aimed at seperating solvent ones from insolvent ones.  In the longer run, Stein thought that there needed to be a new mechanism for resolving financial distress in financial firms that keeps some of the features of bankruptcy, but avoids the problem of runs.

You can learn more about Jeremy Stein’s appointment in the Harvard Crimson article here and also in the Wall Street Journal's Real Time Economic Coverage on January 29, 2009.