Under Greenspan's watch, the US economy enjoyed its longest economic expansion since the second World War and suffered only two mild and short-lived recessions, a remarkable record given that the past two decades have been anything but tranquil.
Even now, the list of potentially devastating shocks that hit the US economy during Greenspan's term makes for scary reading: stock market crashes in 1987 and 2001; the 1998 emerging-market financial crisis; 9/11; Enron and other corporate scandals; and, more recently, sky-high oil prices.
I was an economic adviser at the Federal Reserve during many of these events and have little doubt that any one of them could have plunged the US into deep recession.
But in each case Greenspan proved to be a superb crisis manager, quickly calming financial markets and restoring confidence in the US economy.
His experience, knowledge of the economy, and the respect with which he was held by market participants were crucial in allowing him to take decisive action.
Equally as important, Greenspan didn't panic when US economic growth moved up to a rate well above it's long-term trend around the mid-1990s.
While many commentators were calling for sharp hikes in interest rates to prevent the economy from overheating, Greenspan had spotted something in the country's productivity statistics that convinced him that faster growth was sustainable and as a result tightened monetary policy only moderately.
Greenspan turned out to be right, and the US economy expanded rapidly in the late 1990s without triggering a pick-up in inflation.
Greenspan's ability to gauge the economy correctly owed much to his insatiable appetite for facts and figures.
He had an extraordinary capacity to read, absorb and retain the vast amount of information supplied to him by the Fed staff and outside sources.
He approached his job like a detective, searching for clues about the true state of the US economy amid the fog of statistics provided to him.
But he was also open-minded, sometimes giving greater weight to anecdotal evidence than to the results of formal statistical analysis.
Alan Greenspan will be a hard act to follow. Fortunately, in Ben Bernanke the Fed has a highly respected new chief who, like Alan Greenspan, combines academic expertise and practical experience in monetary and fiscal policy.
Bernanke has promised to stick with the policies of his predecessor, targeting low inflation while retaining the flexibility to respond swiftly to unexpected developments. If he's half the chairman that Greenspan was, he'll be a good one.
Alan Ahearne is vice dean for Research at the JE Cairnes Graduate School of Business & Public Policy at NUI Galway and a research fellow at Bruegel, a Brussels-based economics think tank.
