Alan Greenspan, former chairman of the Fed, dies at age 100

Alan Greenspan, the longtime Federal Reserve chairman known as “the Maestro” who became one of the most influential economic policymakers of his era and famously warned of “irrational exuberance,” has died. He was 100.

The influential economist died Monday at his home from complications of Parkinson’s Disease, said his wife of 29 years, Andrea Mitchell, the chief Washington correspondent and chief foreign affairs correspondent for NBC News.

“He was a giant of a man who helped shape the U.S. economy for decades under presidents of both parties, but was always honest in acknowledging his mistakes,” Mitchell said in a statement.

Greenspan was appointed Fed chairman in 1987 by President Ronald Reagan and held the position — through busts and booms — until retiring in 2006. His tenure was the second longest, four months short of that of William McChesney Martin, who presided over the central bank from 1951 to 1970.

The Fed in a statement Monday morning said it noted Greenspan’s passing “with deep sadness” and said his “contributions to monetary policy and economic thought left a lasting mark on this institution, on the broader field of economics, and on the country.”

During Greenspan’s time at the Fed, stock markets prospered but not without periods of extreme volatility. His loose hand at the central bank is sometimes cited as a cause of the 2008 financial crisis.

Ben Bernanke, who was Greenspan’s successor and guided the economy through the crisis, noted Greenspan’s importance.

“He was a great central banker who helped lead his country through almost two decades of prosperity,” Bernanke said. “I always found him generous with his time and insights. We are still learning from him, even if he is no longer with us.”

It was his unusual frankness in one televised speech, on Dec. 5, 1996, that set off a bit of market madness. Discussing the challenges of setting monetary policy, he said:

“How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? … We should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy.”

The phrase “irrational exuberance” was interpreted as a signal that Greenspan thought the market was overvalued. The Tokyo stock market, which was open at the time, sank 3% on the comment, and other markets subsequently tumbled. However, the markets quickly recovered and continued to climb until the dot-com bust in 2001.

Years earlier, in 1974, when he was chairman of the White House Council of Economic Advisers, Greenspan had to explain on Capitol Hill why the administration wasn’t whipping inflation now, as the Ford administration dubbed its war on rising prices. In a sure-to-befuddle Greenspanism, he said: “It is a tricky problem to find the particular calibration in timing that would be appropriate to stem the acceleration in risk premiums created by falling…