Raghuram Rajan, Raj Chetty, Asha Sharma joined to review the workings of the US Federal Reserve; Warsh Says 'I'm Honored'

Former Reserve Bank of India (RBI) governor Raghuram Rajan, Indian-American economist Raj Chetty and senior Microsoft executive Asha Sharma have been invited by the US Federal Reserve to review the way it conducts monetary policy.

Former Bank of England governor Mervyn King, former Walmart CEO Doug McMillon, Nobel laureate Thomas Sargent and Silicon Valley venture capitalist Marc Andreessen were also included in the five task forces announced by newly appointed Fed chairman Kevin Warsh, according to PTI.

“I am honored that the best minds from a wide range of fields have agreed to work with us to sharpen our performance as an institution. The goal is clear: to ensure that the Fed is in the best position to achieve our goals in this follow-up period,” Warsh said in a statement Thursday.

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He said the U.S. economy has changed significantly over the past generation, and each task force will carefully consider whether the means, methods, analytical tools and policy approaches of policymakers can be improved.

The five working groups will examine areas key to the broad implementation of monetary policy.

They will be co-led by external advisors – renowned economists, business leaders and former central bankers – with deep experience in their respective fields.

With the support of Federal Reserve staff, they will operate independently, with a mandate to track evidence, provide candid feedback and present rigorous findings to the Federal Open Market Committee, the Federal Reserve said in a statement.

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Rajan will serve on the Balance Sheet Policy Task Force alongside Harvard economist Karen Dynan and former Federal Reserve Governor Jeremy Stein.

The panel will examine the costs, benefits, and institutional implications of the Federal Reserve’s current balance sheet regime, including asset holdings and their role in the conduct of monetary policy.

Chetty, a Harvard University economist, co-chaired the Data task force with McMillon and University of Chicago economist Kevin Murphy.

The group will focus on improving the quality and timeliness of real economic signals that inform the Federal Reserve’s policy decisions.

Chetty is known for pioneering the use of large administrative and real-time data sets to study economic mobility, inequality, and labor markets in the United States.

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The Wisconsin-born Sharma, executive vice president of Microsoft and CEO of XBox, will serve on the Productivity and Jobs task force along with venture capitalist Andreessen and Stanford economist Charles I Jones.

The panel will assess the economic impact of emerging universal technologies, including artificial intelligence, on productivity, employment and economic growth.

A communications task force led by Peter Fisher, Arminio Fraga and former Bank of England governor Mervyn King will review how the Federal Reserve communicates its policy actions and decisions in times of uncertainty.

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The Inflation Frameworks Working Group, led by Harvard economist Greg Mankiw, Nobel laureate Thomas Sargent and former Bank for International Settlements adviser William White, will re-examine how the central bank understands and responds to the drivers of inflation.