narayana kocherlakota : address to north dakota state university opening remarks by mr narayana kocherlakota, president of the federal reserve bank of minneapolis in an address to north dakota state university, fargo, 15 april 2014. * * * thanks to david fettig, terry fitzgerald and sam schulhofer - wohl for their assistance with these remarks thanks for the introduction, howard, and thank you for the invitation to join you here today. it ’ s a pleasure to be back in fargo. i ’ ll kick things off with some basics about the federal reserve system and the federal open market committee ( the fomc ). but the plan is for us to spend the bulk of our evening on your questions. one key point before i start : the views i express today are my own and are not necessarily those of others in the federal reserve system, including my colleagues on the fomc. in terms of basics about the fed : i like to tell people that the fed is a uniquely american institution. what do i mean by that? well, relative to its counterparts around the world, the u. s. central bank is highly decentralized. the federal reserve bank of minneapolis is one of 12 regional reserve banks that, along with the board of governors in washington, d. c., make up the federal reserve system. our bank represents the ninth of the 12 federal reserve districts and includes montana, the dakotas, minnesota, northwestern wisconsin and the upper peninsula of michigan. eight times per year, the fomc meets to set the path of interest rates over the next six to seven weeks. all 12 presidents of the various regional federal reserve banks – including me – and the seven governors of the federal reserve board contribute to these deliberations. however, the committee itself consists only of the governors, the president of the federal reserve bank of new york and a rotating group of four other presidents. i ’ m one of those four presidents this year. in this way, the structure of the fomc mirrors the federalist structure of our government, because representatives from different regions of the country – the various presidents – have input into fomc deliberations. this basic federalist structure has a long history. in fact, this year is the centennial of the opening of the 12 reserve banks and the start of the work undertaken by the federal reserve system. it ’ s been a fascinating hundred years, with many twists and turns along the way. i

narayana kocherlakota : economics at the federal reserve banks opening statement by mr narayana kocherlakota, president of the federal reserve bank of minneapolis, at the panel discussion, american economic association annual meeting, philadelphia, pennsylvania, 4 january 2014. * * * i thank dave fettig and sam schulhofer - wohl for their helpful comments. i ’ d like to use this opportunity to talk about the role of economic research and economists within a reserve bank. my main theme is that, to be successful at their host of responsibilities, reserve banks need economists with a wide range of perspectives and skills. conversely, economists in a variety of fields can enjoy fulfilling and successful careers at reserve banks. i ’ ll illustrate my points by using examples from my own institution, the federal reserve bank of minneapolis. the views that i express today are my own and not necessarily those of others in the federal reserve system, including my colleagues on the federal open market committee. my first observation is that, just like economists who work at universities and colleges, many economists within reserve banks spend a great deal of time on independent research. many reserve banks – including the minneapolis federal reserve bank – have found that, especially over the longer term, this self - directed research has the power to create valuable new insights into important public policy questions. for example, back in the 1990s, harold cole and lee ohanian – then at the minneapolis fed – developed an exciting and important new way to think about the slow recovery during the great depression. 1 this work in economic history has turned out to be a valuable resource for many who are thinking about the current slow recovery. over the past four decades in minneapolis, we have found that, to be effective, independent research should follow the usual rules of academic economics. more specifically, economists must be free to pursue any question, use any available tools and arrive at any answer. the quality of those answers is ultimately measured by rigorous academic peer review, not by internal managerial judgment. so, university and reserve bank jobs are not all that different in terms of the role of independent research. what distinguishes academic jobs from reserve bank jobs for economists is how they spend their non - research time. economists with academic jobs spend most of their non - research time teaching. economists with reserve bank jobs spend most of their non - research time supporting public policy work. as i stated at the outset, my main theme today is that public policy work in a reserve bank relies on a much wider variety