Narayana Kocherlakota, former chair of the University of Minnesota economics department, has been tabbed to become the president of the Federal Reserve Bank of Minneapolis.
Though only five of the regional Fed presidents get to vote on interest-rate decisions at any one time, there are only 12 regional slots in total, so each one is important.
The Wall Street Journal today, in reporting on the appointment, wrote in part, “many of his papers have been highly theoretical works focusing on imperfections in financial markets.”
Amen to that. A short trip to Kocherlakota’s web site finds a list of the academic papers he’s authored. I clicked on one titled “Injecting Rational Bubbles,” published in 2008 in the Journal of Economic Theory.
The abstract begins this way: “This paper proves two theorems about economies with a finite number of infinitely lived agents who trade a complete set of one-period Arrow securities and several infinitely lived securities at each date …”
Presumably, the new Minneapolis Fed chief will speak a different language to his new wider and less abstract audience…