Raghuram Rajan, Raj Chetty and Asha Sharma join US Federal Reserve task force amid policy review
Former Reserve Bank of India (RBI) governor Raghuram Rajan has been appointed to one of the newly constituted task forces of the US Federal Reserve as the central bank undertakes a comprehensive review of its monetary policymaking framework following years of elevated inflation.
The appointment was announced by newly appointed Federal Reserve Chair Kevin Warsh as part of a wider reform initiative involving five specialised task forces examining different aspects of the Fed’s functioning.
Rajan is among three Indian-origin experts selected for the initiative, alongside economist Raj Chetty and Microsoft executive Asha Sharma.
Raghuram Rajan has been named to the Federal Reserve’s Balance Sheet Policy Task Force, where he will work alongside Harvard economist Karen Dynan and former Federal Reserve Governor Jeremy Stein.
According to the announcement, the panel will assess the costs, benefits and institutional implications of the Fed’s balance sheet framework, including its asset holdings and their role in implementing monetary policy.
Kevin Warsh said the task forces were created to bring fresh perspectives as the Federal Reserve seeks to improve its decision-making after inflation remained above its target for more than five years. “Our purpose here is to make better decisions in the conduct of monetary policy and put these years of high inflation behind us,” Warsh said.
Fed launches five reform panels
The Federal Reserve has constituted five task forces to review key areas, including communications, balance sheet policy, economic data, productivity and jobs, and the inflation framework.
The broader initiative also includes several prominent economists and business leaders, such as former Bank of England Governor Mervyn King, Nobel laureate Thomas Sargent, former Walmart CEO Doug McMillon and venture capitalist Marc Andreessen.
Warsh said he had invited experts with diverse perspectives to strengthen transparency and institutional performance.
Harvard economist Raj Chetty has been appointed to co-lead the Data Task Force along with Doug McMillon and University of Chicago economist Kevin Murphy.
The panel will focus on improving the quality and timeliness of economic data used in the Federal Reserve’s policymaking process.
Meanwhile, Microsoft Executive Vice President Asha Sharma, who also serves as CEO of Xbox, has joined the Productivity and Jobs Task Force alongside Marc Andreessen and Stanford economist Charles I. Jones.
The group will study the impact of emerging technologies, including artificial intelligence, on productivity, employment and long-term economic growth.
Rajan’s experience
Raghuram Rajan served as the Governor of the Reserve Bank of India from 2013 to 2016. Before leading India’s central bank, he was the Chief Economist and Director of Research at the International Monetary Fund (IMF). His appointment comes as the US Federal Reserve reviews its monetary policy framework following the expansion of its balance sheet during the pandemic and subsequent efforts to reduce it while bringing inflation closer to its long-term target.