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Well-Fed?

Will Greenspan's successor be able to give the economy the nourishment it needs?

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This story appears in the January 2002 issue of Entrepreneur. Subscribe »

The stock and bond markets tend to hang on every word Alan Greenspan speaks. So what happens when those words include "goodbye"? After the second longest reign as Federal Reserve chairman in the history of the position, Greenspan is expected to retire at the end of his current term in 2004. But no clear successor has emerged.

Analysts expect markets to dip once a successor is named, but predict a swift recovery if skittish investors are won over. A reputation as an inflation fighter and a grasp of the Fed's limitations are what the markets will look for. "My bet is that under a Bush administration it will be someone close to the equity markets," says J. Patrick Raines, an economics professor at the University of Richmond in Richmond, Virginia. Such a choice will go a long way to reassure the markets, particularly because it resonates with Greenspan's own policies.

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