Former Reserve Bank of India (RBI) Governor Raghuram Rajan has been selected by the US Federal Reserve to serve on a key policy review panel as part of a broader effort to reassess the central bank’s approach to monetary policy after years of elevated inflation.
Joining him are two other Indian-origin experts, economist Raj Chetty and Microsoft executive Asha Sharma. The appointments form part of five task forces announced by newly appointed Federal Reserve Chair Kevin Warsh to examine different aspects of the institution’s functioning.
Announcing the initiative, Warsh said, “I am honoured that the best minds from a range of disciplines have agreed to work with us to sharpen our performance as an institution. The goal is straightforward: to ensure the Fed is best positioned to achieve our objectives in this consequential time.”
Rajan to review Federal Reserve’s balance sheet
According to PTI, Rajan will be part of the balance sheet policy task force alongside Harvard economist Karen Dynan and former Federal Reserve Governor Jeremy Stein.
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The panel has been tasked with reviewing the Federal Reserve’s balance sheet framework, including its asset holdings, the costs and benefits of the current system, and its role in implementing monetary policy.
Warsh said the task forces were formed to bring in a wide range of perspectives.
“I reached out to 15 people who I have known and trusted with a diversity of views. It’s a move towards transparency and new ideas,” he said.
He added that the review will focus on five major areas: communications, balance sheet policy, economic data, productivity and jobs, and the inflation framework.
“Our purpose here is to make better decisions in the conduct of monetary policy and put these years of high inflation behind us,” Warsh told senators.
Rajan, who led the RBI between 2013 and 2016, previously served as chief economist and director of research at the International Monetary Fund. He is widely recognised for his work on financial stability and global monetary policy.
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Other Indian-origin members
Harvard economist Raj Chetty has been named to the data task force, where he will work with former Walmart CEO Doug McMillon and University of Chicago economist Kevin Murphy. The group will examine ways to improve the quality and speed of economic data used in policy decisions.
Meanwhile, Microsoft executive and Xbox CEO Asha Sharma will join the Productivity and Jobs task force. Alongside venture capitalist Marc Andreessen and Stanford economist Charles I. Jones, the panel will study how emerging technologies, including artificial intelligence, could influence productivity, employment and long-term economic growth.
FAQs:
What role will Raghuram Rajan play at the US Federal Reserve?
He will serve on the balance sheet policy task force reviewing the Fed’s balance sheet framework and monetary policy implementation.
Who are the other Indian-origin experts appointed by the US Fed?
Harvard economist Raj Chetty and Microsoft executive Asha Sharma have also been named to separate Federal Reserve task forces.
