Neel Kashkari, president of the Federal Reserve Bank of Minneapolis launched a new research institute Jan. 15 that will be focused on economic inequality, stepping outside the traditional bounds of the central bank’s focus on monetary policy.
Christened ‘Opportunity and Inclusive Growth Institute’, the new initiative will conduct and promote research that increases economic opportunity and inclusive growth for all Americans.
Ohio-born Kashkari, who has a bachelor’s and a master’s degrees in mechanical engineering, both from the University of Illinois at Urbana-Champaign, and an MBA from the Wharton School at the University of Pennsylvania, has taken a nontraditional approach to solving problems as Federal Reserve president of Minneapolis. In contrast to many Fed officials, he has no training as an economist.
“Travelling around the Ninth District has helped me understand the economic challenges that we face in our region. Too many families rightly feel that their kids don’t have access to a bright future,” Kashkari said in a press statement.
“While this Institute will bring together the best academic scholarship from around the nation, the intended effect is on the personal level, helping families and communities improve their prospects,” he said.
Speaking at the Minneapolis Urban League last week, Kashkari said by supporting scholarship on issues of economic inequality, the institute will help direct policy makers outside the Fed toward potential solutions. While the solutions may not be imposed by the Fed, the institute’s research would be part of fulfilling the central bank’s goal of maximum employment, Kashkari said.
The initiative was described by Federal Reserve Board Chair Janet Yellen as an important initiative with potential for finding economic opportunity for people. “The Opportunity and Inclusive Growth Institute is an important research initiative focusing on some of the most pressing economic issues we face as a nation,” Yellen said in a statement.
“This work has the potential to help more Americans find real economic opportunity. I hope that scholars inside and outside the Federal Reserve System will contribute to this important work,” she said.
The Institute, based at the Minneapolis Fed, is a long-term commitment designed to engage a broad range of scholars. It will look beyond aggregate economic indicators to examine how national policies impact diverse communities of people within the U.S. economy.
Such scholarship, Keshkari said, will allow the Federal Reserve System to better achieve one of its primary missions – maximum employment – and generate important new insights for other policymakers and the public.
The Institute will adopt a multidisciplinary approach that includes the participation of leading academics from a variety of fields, including economics, education, law, public health, public policy and sociology. A distinguished group of academics have joined the advisory board to help launch the Institute, including Raj Chetty, professor of economics at Stanford University and Greg Kaplan, professor of economics at the University of Chicago.
Board members will help the institute by identifying topics where the Federal Reserve System can make a significant contribution, and by recruiting visiting scholars. In the future, the board’s support will grow and adjust according to the needs of the institute and the direction of developing scholarship.