Stanley Fischer PhD ’69, MIT professor emeritus of economics and a towering figure in both academic macroeconomics and global economic policymaking, passed away on May 31. He was 81. Fischer was a foundational scholar as well as a wise mentor and a central force in shaping the macroeconomic tradition of MIT’s Department of Economics that continues today.
“In conjunction with Rudi Dornbusch and later Olivier Blanchard, Stan was one of the intellectual engines that propelled MIT macroeconomics in the 1970s and beyond,” states Ricardo Caballero PhD ’88, one of Fischer’s students and presently the Ford International Professor of Economics at MIT. “He was subtly brilliant, never ostentatious, and perpetually sharp. His pupils absorbed lessons not merely from his lectures or his groundbreaking work on New Keynesian models and rationale expectations, but from the lucidity of his intellect and the warmth of his humor. Nearly 40 years later, I can still hear him saying: ‘Isn’t it simpler to do it right the first time than to justify why you didn’t?’ That phrase has lingered with me ever since. A straightforward remark from Stan during a seminar — often shared with a disarming smile — could dismantle a weak argument or solidify a key insight. He taught multiple generations of macroeconomists to value discipline, clarity, and policy significance.”
Olivier Blanchard PhD ’77, the Robert M. Solow Professor of Economics Emeritus at MIT and another advisee, elucidates that Fischer “was renowned for being one of the most popular educators, and one of the most sought-after thesis supervisors. We gathered in droves at his office, and I presume the only time he had for research was at night. What we admired most were his technical capabilities — he was adept at using stochastic calculus — and his knack for tackling significant questions while simplifying them to the extent that the answers, retrospective, seemed evident. When Rudi Dornbusch joined him in 1975, macro and international fields rapidly became the most thrilling domains at MIT.” Within a decade of joining the MIT faculty, “Stan had gained near-guru status.”
Fischer fostered connections between economic theory and the execution of economic policy. He held roles as chief economist of the World Bank (1988-90), deputy managing director at the International Monetary Fund (IMF, 1994-2001), governor of the Bank of Israel (2005-13), and vice chair of the U.S. Federal Reserve (2014-17). These leadership positions provided him with a unique opportunity to enact ideas he cultivated in the classroom, and he garnered widespread acclaim for his effectiveness in preventing financial crises across multiple decades and regions. Nonetheless, even while navigating the highest echelons of global policymaking, he retained his essence as a teacher — approachable, contemplative, and generous with his time.
At MIT, Fischer is fondly recalled for motivating generations of graduate students who transitioned between academia and policy just as he did. Over two decades prior to embarking on his active policy career, he was the primary adviser for 49 PhD students, secondary adviser to 23 others, and a revered educator for countless more.
Numerous students of his rose to prominence as key macroeconomic policymakers, including Ben Bernanke PhD ’79; Mario Draghi PhD ’77; Ilan Goldfajn PhD ’95; Philip Lowe PhD ’91; and Kazuo Ueda PhD ’80, who chaired the Federal Reserve Board, the European Central Bank, the Banco Central do Brazil, the Reserve Bank of Australia, and the Bank of Japan. Students Gregory Mankiw PhD ’84 and Christina Romer PhD ’85 led the Council of Economic Advisors; Maurice Obstfeld PhD ’79 and Kenneth Rogoff PhD ’80 served as chief economists at the International Monetary Fund; and Frederic Mishkin PhD ’76 held a governorship at the Federal Reserve. Another of his students, former Treasury Secretary Lawrence Summers ’75, remarks that “no one had more cumulative influence on the macroeconomic policymakers of the last generation than Stanley Fischer … We all were molded by his lucidity of thought, intellectual balance, personal integrity, and character. In broader terms, every individual engaged in the macro policy endeavor was Stan Fischer’s disciple. People globally who never knew his name lived better, more secure lives due to his contributions through his teaching, writing, and service.”
Fischer was raised in Northern Rhodesia (now Zambia), living behind the general store operated by his family before moving to Southern Rhodesia (now Zimbabwe) at the age of 13. Motivated by the caliber of writing in John Maynard Keynes’ “The General Theory of Employment, Interest, and Money,” he applied for and secured a scholarship to study at the London School of Economics. He subsequently moved to MIT for his graduate studies, where his dissertation was mentored by Franklin M. Fisher. After spending several years on the faculty of the University of Chicago, he returned to MIT in 1973, remaining there for the rest of his academic journey. He held the Elizabeth and James Killian Class of 1926 professorship from 1992 to 1995, serving as department chair in 1993–94, before being recruited by the IMF.
Fischer’s intellectual voyage from MIT to Chicago and back culminated in his most impactful academic contributions. Ivan Werning, the Robert M. Solow Professor of Economics at MIT, notes, “his research was groundbreaking and laid the foundation for the modern approach to macroeconomics. By merging nominal rigidities tied to MIT’s Keynesian tradition with rational expectations originating from the Chicago school, his 1977 paper on ‘Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule’ demonstrated how the non-neutrality of money did not necessitate agent irrationality or confusion.” The dynamic stochastic general equilibrium models now employed at every central bank to assess monetary policy choices are direct offspring of Fischer’s thoughts.
Fischer’s influence extends beyond what has come to be recognized as New Keynesian Economics. Werning continues, “Fischer’s research integrated theoretical insights with highly applied questions. His textbook with Blanchard proved essential to an entire generation of macroeconomists, illustrating macroeconomics as a rich and evolving discipline, brimming with tools and significant questions to explore. Together with Bob Solow, Rudi Dornbusch, and others, Fischer made a profound impact within the MIT economics department and contributed to its daily culture, fostering an inquisitive, open-minded, and welcoming environment.”
Macroeconomics — and MIT — owe him a deep sense of gratitude.
Fischer is survived by his three sons, Michael, David, and Jonathan, along with nine grandchildren.