Narayana Kocherlakota

Narayana Rao Kocherlakota
Born	(1963-10-12) October 12, 1963 Baltimore, Maryland, U.S.
Occupation	Economist
Years active	1987–present
Known for	12th president of the Federal Reserve Bank of Minneapolis; member of the Federal Open Market Committee

Narayana Rao Kocherlakota (born October 12, 1963) is a distinguished American economist currently holding the Lionel W. McKenzie Professorship in Economics at the University of Rochester. He was the 12th president of the Federal Reserve Bank of Minneapolis, a position he held from 2009 until December 31, 2015, and became a member of the Federal Open Market Committee in 2011. In 2012, Foreign Policy magazine recognized him as one of the world’s top 100 Global Thinkers.

Early life and education

Born in Baltimore, Maryland, Kocherlakota is the son of a European American mother and a Telugu Hindu father originating from the Coastal Andhra area of southern India. Both his parents earned PhDs in statistics from Johns Hopkins University and were faculty members at the University of Manitoba in Canada, where Kocherlakota spent much of his youth.

He matriculated to Princeton University at just 15 years old, completing an A.B. in Mathematics in 1983 with a senior thesis titled "Optimal income taxation" under the guidance of Robert M. Anderson. He later obtained his Ph.D. in economics from the University of Chicago in 1987.

Academic

Kocherlakota launched his academic journey at the Kellogg School of Management at Northwestern University before accepting economics faculty roles at the University of Iowa, Stanford University, and University of Minnesota. Between 2006 and 2008, he chaired the economics department at the University of Minnesota, spearheading a strategic hiring initiative that brought nine new economists within two years, elevating the department’s national ranking from 15th to 10th according to U.S. News & World Report.

His scholarly interests lie primarily in monetary economics, asset pricing, and public finance, with contributions published in premier journals such as Econometrica, Journal of Political Economy, and Journal of Monetary Economics.

Kocherlakota is credited with founding "New Dynamic Public Finance," a framework that integrates dynamic taxation challenges with principal-agent Contract theory, thereby applying contract theory methods to enhance tax system design. His research encompasses optimal taxation strategies and unemployment insurance policies. In 2010, he authored the graduate-level textbook The New Dynamic Public Finance, published by Princeton University Press.

In 2008, he joined a group of 270 economists who endorsed a petition funded by the Cato Institute expressing reservations about the Obama administration’s economic stimulus package. He clarified that his endorsement aimed to emphasize ongoing academic debate regarding the stimulus’s efficacy.

Minneapolis Fed presidency

Kocherlakota assumed leadership as president of the Federal Reserve Bank of Minneapolis on October 8, 2009, following the retirement of Gary H. Stern. Prior to this role, he had been serving as a consultant for the Minneapolis Fed since 1999.

In January 2011, he challenged assertions that the Federal Reserve was responsible for the U.S. housing bubble during the 2000s, pointing out that land values increased between 1996 and 2001 despite relatively elevated Fed target interest rates. By August 2011, he was among three governors opposing an extension of near-zero short-term interest rates for an additional two years.

Following his appointment, Kocherlakota notably transitioned from a monetary policy hawk to a dove. This shift was underscored in a September 2012 address where he advocated for maintaining exceptionally low fed funds rates until unemployment dropped below 5.5%, linking labor market issues such as unemployment to insufficient demand. In October 2014, he stood alone in dissenting against ending the quantitative easing asset purchase program, arguing that inflation remained too subdued and that initiating rate hikes in 2015 would be premature.

Since January 1, 2016, Kocherlakota has held the position of Lionel W. McKenzie Professor of Economics at the University of Rochester.

Personal life

Kocherlakota is married to Barbara McCutcheon, who earned her Ph.D. in economics from the University of Chicago. His personal interests include rap music, the work of Jack White, and American football.

External links

• Official biography at the Federal Reserve Bank of Minneapolis