Kashkari: Fed could address economic disparities

Neel Kashkari and Anthony Newby
Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, left, and Anthony Newby, the executive director of Neighborhoods Organizing for Change (NOC), speak with reporters in August.
Peter Cox | MPR News

Minneapolis Federal Reserve Bank president Neel Kashkari said he sees the bank's economists offering possible responses to some of Minnesota's and the nation's biggest economic challenges.

Kashkari made the comments to a gathering of St. Paul business leaders Monday. He said he wants the bank's economists to investigate matters such the income and employment disparities between black and white residents.

"This is an area I want us to weigh in on more heavily because it's a big need for the country," he said. "And because it's in our own community. It's relevant right here."

Kashkari said he wants his team thinking about problems that could be addressed by government entities and other organizations with powers beyond those of the Federal Reserve Bank.

"When we're doing what we can with monetary policy and the economy is not growing as fast as the people would like, I think it's appropriate for us to just do rigorous economic analysis and put the facts out there," he said. "And then let you and the politicians make the judgments on how you want to interpret those facts."

He cited the connection between economic growth and immigration and birth rates as an example.

"You can get population growth two ways: domestic fertility and immigration," he said. "Domestic fertility is not growing as fast as it used to be. You have three choices. We can accept a lower growth rate. We can somehow try to get fertility up. Or you can encourage more immigration."

Kashkari said his other priorities include addressing the threats posed by banks that are still too big to fail and figuring out why the economic recovery has been relatively slow.

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