Senior Bush administration adviser Mr Glenn Hubbard resigned last night as chairman of the White House Council of Economic Advisers.
The White House quickly nominated Harvard University's Mr Gregory Mankiw, a veteran of the Reagan administration, to replace him.
Mr Hubbard's departure followed last year's resignations of Treasury Secretary Mr Paul O'Neill, White House economic aide Mr Lawrence Lindsey and Securities and Exchange Commission chairman Mr Harvey Pitt.
The shake-up comes as the US economy struggles to regain momentum after a business-spending led recession in 2001 and a halting recovery last year.
A rising star in President Bush's economic team, Mr Hubbard was a chief architect of the president's $695 billion tax-cut package proposed by last month in a bid to bolster both the economy and his chances for re-election.
The proposal, the centerpiece of which calls for eliminating the double taxation of corporate dividends, has received a lukewarm reception from many lawmakers and an openly hostile one from Democrats.
In a blow to the White House, Federal Reserve chairman Mr Alan Greenspan said it was "premature" to apply a fiscal jolt before it was clear whether the economy was chiefly weighed down by worries about an Iraq war, and he warned of rising deficits.