Former Reserve Bank of India (RBI) Governor Raghuram Rajan, Microsoft executive Asha Sharma and Delhi-born economist Raj Chetty are among the Indian-origin experts appointed by the US Federal Reserve to review how the world's most influential central bank conducts monetary policy.
The appointments are part of five task forces announced by Federal Reserve Chairman Kevin Warsh on Thursday as the central bank reviews whether its policy tools, data, communications and inflation framework remain suited to an economy being reshaped by artificial intelligence, changing labour markets and shifting inflation dynamics.
"The US economy has changed significantly over the last generation, and never more so than right now," Warsh said in a statement. "Each task force will carefully consider whether policymakers' means and methods, analytical tools and policy approaches can be improved upon."
The panels, comprising economists, business leaders and former central bankers, will work independently with support from Federal Reserve staff and submit their recommendations to the Federal Open Market Committee (FOMC), which sets US monetary policy.
Rajan, now a finance professor at the University of Chicago Booth School of Business, has been named to the Balance Sheet Policy task force alongside former Federal Reserve Governor Jeremy Stein and Harvard economist Karen Dynan. The panel will review the costs, benefits and institutional implications of the Fed's balance sheet, including its asset holdings and their role in implementing monetary policy.
Sharma, executive vice president at Microsoft and CEO of Xbox, will serve on the Productivity and Jobs task force with venture capitalist Marc Andreessen and Stanford economist Charles I. Jones. The group has been tasked with assessing how new general-purpose technologies, including artificial intelligence, could affect productivity, employment and economic growth.
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Chetty, a Harvard University economist known for his work using large administrative and real-time datasets to study economic mobility and labour markets, will join former Walmart CEO Doug McMillon and University of Chicago economist Kevin Murphy on the Data task force. The panel will focus on improving the quality and timeliness of the economic data that informs the Fed's policy decisions.
The remaining task forces will examine how the Federal Reserve communicates policy during periods of uncertainty and revisit the frameworks it uses to understand and respond to inflation.
The review also brings together several prominent economists and policymakers, including former Bank of England Governor Mervyn King, Harvard economist Greg Mankiw, Nobel laureate Thomas Sargent and former Bank for International Settlements adviser William White.
Warsh said the objective was to ensure the Federal Reserve remains "best positioned to achieve our objectives" as the US economy undergoes rapid structural change.
(With inputs from PTI)
