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Obama appoints economist Shambaugh to Council of Economic Advisers

WASHINGTON (Reuters) – Jay Shambaugh, a George Washington University professor, is joining the White House Council of Economic Advisers as its third member, rounding out a team that provides economic analysis and advice to President Barack Obama.

The White House on Wednesday announced Obama’s appointment of Shambaugh, who worked as a staff economist for the CEA from 2009 to 2011. He replaces Maurice Obstfeld, who is joining the International Monetary Fund.

Shambaugh, whose appointment does not require Senate confirmation, joins Jason Furman, Obama’s top economist and head of the CEA, and Sandra Black on the three-member panel.

Shambaugh has served as a visiting scholar at the IMF and is a graduate of Yale University and the University of California, Berkeley. He specializes in international economics and is expected to focus on Greece and China, among other topics.

Economic troubles in China are expected to be high on the agenda when President Xi Jinping comes to the United States for a state visit next month. Financial markets have experienced turbulence all week over fears about China’s slowing economy.

“China is obviously in a different place than it was 20 years ago. It’s now the second largest economy in the world. Things that happen in China matter to the global economy a lot more than they used to,” Shambaugh said in an interview.

“There are always going to be bumps in the road and points in the transition that are difficult,” and those are things the council would watch, he said.

Furman, a longtime economic adviser to Obama, welcomed back his former colleague.

“He was a key contributor to the economic team as the country was fighting the worst recession since the Great Depression and will bring his keen analytical skills to helping to continue to strengthen the economy,” Furman said in a statement.

Shambaugh joins the team with about a year and a half left in the Obama administration and as the White House faces strong opposition from many Republicans in Congress to new economic initiatives.

The administration hopes to seal a trade deal with Asian countries and secure long-term funding for highways and infrastructure through reforms to the corporate tax code in the coming months.

“If 16, 17 months from now I could say I feel like policy was made in a smart way and that we made people’s lives a little bit better, I’d walk away really proud,” Shambaugh said.