Nobel Prize-winning economist Peter Diamond is giving up his bid to be one of the governors of the U.S. central bank. He was nominated for the U.S. Federal Reserve post by President Barack Obama, but now appears unlikely to win Senate confirmation.
The Fed sets interest rates and other economic policies with the goals of containing inflation and maximizing employment.
Diamond is a professor at the Massachusetts Institute of Technology. He won the Nobel Prize for his research on labor markets among other things.
The Fed job is subject to confirmation by the U.S. Senate. Republicans, led by Richard Shelby of Alabama, have worked to block his appointment. The opposition members accuse the Nobel Laureate of knowing too little about monetary policy and being too willing to spend taxpayer money.
In a letter published by the New York Times, Diamond said understanding the labor market is crucial to making key economic decisions. He also complained that the confirmation process has become “distorted” and that some elected officials charged with overseeing monetary policy have very little understanding of the subject.