Personality Spotlight: Paul Volcker

WASHINGTON, Nov. 26 (UPI) -- Paul Volcker, who as U.S. Federal Reserve Board chairman tamed stagflation, will bring extensive monetary policy experience to his new White House post.

U.S. President-elect Barack Obama Wednesday named Volker, 81, to head his Economic Recovery Advisory Board.

Appointed Fed chairman in 1979 by President Jimmy Carter, Volcker was tasked with reining in a 13.5 percent inflation rate, coupled with stagnant economic growth. Using a strategy of limiting the growth of the money supply, he abandoned previous policies of targeting interest rates, and by 1983, inflation had been reduced to 3.2 percent.

But Volcker's moves had their consequences. The tight money supply tamed inflation but also triggered a deep recession that drove unemployment to its highest levels since the Great Depression and Volcker endured political attacks from the hard-hit construction and farming industries, which suffered from high interest rates.

After leaving the Federal Reserve in 1987, Volcker became chairman of the prominent New York investment banking firm, J. Rothschild, Wolfensohn & Co., run by James Wolfensohn, who was later to become president of the World Bank.