Brainard Says Fed Must Do More to Boost Diversity in Its Ranks

(Bloomberg) -- Federal Reserve Governor Lael Brainard said the U.S. central bank must improve its recruitment of women and people from minority backgrounds because greater diversity leads to better policy decisions.

Noting that it was more than a century after the Fed’s creation that the one of its 12 regional banks was headed by an African American -- Raphael Bostic, who became president of the Atlanta Fed in 2017 -- Brainard said “we need to do better.”

“To achieve our goals, we will need to improve the diversity of the economics ecosystem more broadly,” Brainard told a conference in Washington on Saturday to commemorate Sadie T. M. Alexander, the first African American woman to gain a Ph.D in economics.

The Fed hires one of every 25 “newly minted” economics Ph.Ds in the U.S. each year, Brainard said, and therefore has “a significant stake in the diversity and vibrancy of the economics profession overall.”

The Fed gained its first woman leader when Janet Yellen took the helm in 2014. She was passed over for a second term when President Donald Trump picked Jerome Powell to succeed her in 2018. Women remain a minority of the central bank’s leadership.

Brainard, herself an economics Ph.D. from Harvard, is one of five women currently serving as either a governor, of which there are seven when the Fed has a full compliment, or reserve bank president.

In her speech, “Is Economics for Me? Increasing the Participation of Black Women in Economics,” Brainard said that “the field of economics would be the richer from your engagement and has much to offer as you decide how to make your contribution.”

Brainard also cited research showing that greater diversity often results in better outcomes by broadening the range of ideas and perspectives brought to bear. “Microeconomic experiments and other research demonstrate the benefits of diversity for group deliberations and decision-making,” she said.

In the 2016-17 academic year, seven black women and eight black men were awarded doctorates in economics in the U.S. out of a total pool 1,150 economics Ph.D.’s awarded in total, Brainard said, citing American Economic Association figures.

Sadie Tanner Mossell Alexander received her economics Ph.D. from the University of Pennsylvania in 1921 and earned a law degree from the same university. She went on to be the first black woman to practice law in Pennsylvania.

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