Freed Professor of Economics N. Gregory Mankiw, who has chaired the three-member Council of Economic Advisers (CEA) under President Bush since May 2003, resigned from his post in Washington last week and plans to return to Harvard, the White House said yesterday.

His resignation, effective this Friday, allows him to return from his leave without violating a University policy that limits faculty sabbaticals to two years.

“It is time for me to return to my family, my students, and my books,” Mankiw wrote in his resignation letter, released yesterday. which was dated to Feb. 9.

He praised the Bush administration for furthering “the American dream by guiding the economy through difficult times,” and he said that Bush had “worked to create an environment where all Americans can realize the potential with which their creator has endowed them.”

Mankiw could not be reached for comment yesterday.

While Mankiw never publicly stated how long he intended to remain at the White House, professors in the Economics Department say that they were not surprised by his decision to return to the University.

“We were anticipating that he would come back, and of course it’s great for Harvard that he would come back,” said Warburg Professor of Economics Robert J. Barro.

Baker Professor of Economics Martin S. Feldstein ’61, who uses Mankiw’s book “Principles of Economics” as the main text in his introductory course. Social Analysis 10, echoed these sentiments.

“His students and colleagues will benefit from his experience,” Feldstein wrote in an e-mail.

Mankiw drew criticism in his post last fall, when he stated just before the election that outsourcing jobs to foreign countries can sometimes benefit the economy.

But both Barro and Feldstein say that Mankiw’s decision to return to Harvard did not have to do with political conflicts.

According to Barro, Mankiw is “a very careful person,” and his departure from the White House is most likely a result of his desire to return to Harvard before the two-year limit on his sabbatical expires.

“I don’t think it was interaction with policy or anything like that, I think it was just timing,” Barro said.

The CEA advises the president on economic matters, assisting him in preparing his economic reports, analyzing macroeconomic trends, studying the impact of government programs, and developing economic policy.

The CEA’s three members are all appointed by the president, who also selects the chairman.

Barro said Mankiw’s tenure at the CEA was generally viewed positively.

“I think his tenure was very successful. To the extent that [the CEA] had some impact, the economy did very well during the time he was there, so I guess he deserves some credit for that,” he added.

Feldstein also praised Mankiw’s work in the White House.

“Greg served with distinction,” he said, “but it is now time for him to return.”

—Staff writer Matthew Lebowitz can be reached at mslebow@fas.harvard.edu.