MINNEAPOLIS, Jan 18 (Reuters) - The Federal Reserve is launching a research institute to generate ideas elected officials might use to help more Americans move up the income ladder, Minneapolis Fed President Neel Kashkari said on Wednesday.
The institute will be housed at the Minneapolis Fed and has the backing of Fed Chair Janet Yellen who is urging economists within the Fed system to participate in the research, Kashkari said in prepared remarks that did not refer to the U.S. economic outlook.
The Fed has appeared in recent years to more closely follow racial economic disparities and income inequality trends. Staff economists at the Fed’s Washington-based Board of Governors have prepared briefs on economic trends for different racial groups, while Yellen has called income inequality a major long-term economic problem.
Yellen in turn has been criticized by congressional Republicans for expressing these views, which they have deemed overtly political and supportive of the Obama administration’s own priorities. She has also been criticized by liberal groups for failing to do more to fight inequality.
Kashkari, who took the helm at the Minneapolis Fed in January 2016, said the Fed’s trove of hundreds of PhD economists make it well suited to help research why racial unemployment gaps have been so persistent in America and why more recent generations struggle to move up the income ladder.
Coming up with ideas fiscal policymakers might use to fix these problems might “help the Federal Reserve achieve its maximum employment mandate,” Kashkari said. (Reporting by Jason Lange; Editing by Chizu Nomiyama)