Former Reserve Bank of India Governor Raghuram Rajan, Delhi-born economist Raj Shetty, and Microsoft CEO Asha Sharma have been appointed to key task forces formed by the US Federal Reserve to review monetary policy.
Newly appointed Federal Reserve Chairman Kevin Warsh announced the creation of five task forces to study critical areas of monetary policy making, including communications, balance sheet policy, data, productivity and jobs, and inflation frameworks.
According to the Fed, the committees will be supported by its staff but will operate independently while making recommendations to the Federal Open Market Committee (FOMC).
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Rajan to review balance sheet policy
Raghuram Rajan has been appointed to the Balance Sheet Policy Task Force alongside Harvard economist Karen Dinan and former Federal Reserve Governor Jeremy Stein.
The committee will examine the costs, benefits, and institutional implications of the Federal Reserve’s current balance sheet system.
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Shetty, Sharma assigned to main boards
Economist Raj Chetty from Harvard University will work on the data task force with Doug McMillon and economist Kevin Murphy from the University of Chicago.
The committee will focus on improving the quality and timeliness of economic data used in the Federal Reserve’s policy judgments.
Shetty is recognized for his work using real-time and administrative data to study economic mobility, inequality, and labor markets.
Microsoft Executive Vice President and Xbox CEO Asha Sharma has been named to the Productivity and Jobs Task Force alongside Marc Andreessen and Stanford University economist Charles I. Jones.
The group will evaluate the economic impact of new general-purpose technologies, including artificial intelligence, to guide the Federal Reserve’s policy judgments.
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Warsh explains the monetary policy review
When announcing the initiative, Warsh said that the review comes at a time when the American economy is witnessing major changes.
“The Fed’s commitment to price stability and maximum employment is unwavering. So is our determination to vigorously pursue our mission,” Warsh said.
He added: “The American economy has changed dramatically over the past generation, and never more so than now. Each task force will carefully consider whether policymakers’ methods, analytical tools, and policy approaches can be improved. I am honored that the best minds from a range of disciplines have agreed to work with us to improve our performance as an institution. The goal is clear and straightforward: to ensure that the Fed is best positioned to achieve our goals at this important time.”
The task forces also include former Bank of England Governor Mervyn King, Nobel Prize winner Thomas Sargent, former Walmart CEO Doug McMillon, and Silicon Valley venture capitalist Marc Andreessen.
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Other working groups
The communications team will be led by Peter R. Fisher, Arminio Fraga and Mervyn King. It will review how the Fed communicates policy deliberations and decisions during periods of uncertainty.
The inflation frameworks task force will be chaired by Harvard economist Greg Mankiw, Nobel laureate Thomas Sargent, and former Bank for International Settlements advisor William White. The committee will reconsider how the Fed understands and responds to the drivers of inflation.
According to the Federal Reserve, the five task forces will be co-led by economists, business leaders, and former central bank practitioners with expertise in their respective fields. The central bank said the groups will work independently with a mandate to follow evidence, provide frank comments, and reach tough findings for the Federal Open Market Committee.
