Hoping to make his institution a force for economic equality, Minneapolis Federal Reserve President Neel Kashkari on Wednesday unveiled a new effort he said would focus on the well-being of all Americans.
The Opportunity and Inclusive Growth Institute will "conduct and promote research that will increase economic opportunity and inclusive growth for all Americans and help the Federal Reserve achieve its maximum employment mandate," Kashkari said in a speech at the Minneapolis Urban League.
He didn't detail the institute's funding or budget but said the Minneapolis Fed would host a conference May 22 to explore topics related to its mission.
Kashkari has recruited an advisory board of academic all-stars from universities across the country. He said he envisions three to five visiting scholars a year working alongside Minneapolis Fed economists.
"A lack of economic opportunity does not know racial or ethnic boundaries," he said. "There are people in all communities who are struggling to get a fair chance at a good education and a good job."
Minneapolis Urban League President Steven Belton said it's good to bring the resources of the Fed to bear on the issue of economic inequality. But he said race is the elephant in the room, and racial disparities will have to be a focus area of the research.
"If they're going to be honest and transparent about researching the causes of income and opportunity disparities," said Belton, "they're going to encounter race."
Kashkari acknowledged the traditional view among central bankers is there's not much they can do about economic inequality. A few years ago, Janet Yellen, chair of the Federal Reserve System, was chastised by some members of Congress for talking about the issue. In a written statement, Yellen offered support for Kashkari's plan.
University of Minnesota political scientist Larry Jacobs said he was impressed with Kashkari's proposal and the nationally prominent advisors recruited for its board. The academics come from a wide range of fields, including economics, education, law, public health, public policy and sociology.
Still, he expects Kashkari, a former Republican candidate for governor of California, may take some heat.
"This is a singular effort to now orient the Fed toward gaps in economic opportunity and outcomes. This is so far from what Republicans in Congress are advocating," Jacobs said. "This is going in the opposite direction."
Kashkari said Wednesday he realizes he may catch some flack. But he said he's carrying out an important part of the Fed's mission to increase employment.
"If people want to criticize us for doing the right thing," he said, "I'm happy to take the criticism."