President-elect Barack Obama has named the 81-year old former chief of Federal Reserve Board, Paul Volcker, as head of the new White House economic advisory committee, in what he said, to tap minds that have an unconventional thinking.

Volcker, a professor at the University of Chicago, was the Federal Reserve chief under presidents Carter and Regan and is best remembered for bringing down high inflation in the late 1970s caused by the first oil shocks.

Announcing the appointment at a news conference in Chicago, Obama said, ''Volcker is one of the world's foremost economic policy experts and has served under both Republicans and Democrats and is held in the highest esteem for his sound and independent judgment. He has a long and distinguished record of service to our nation, and I am pleased that he has answered the call to serve once again.''

"So, you know, I was elected with the charge of getting this economy back in shape but also making sure that it's working on behalf of middle-class families," he said.

"In order to do that, I've tried to bring together the best economic minds, people who don't always agree with each other but all share a commitment to making sure that we're growing the pie and that equal opportunity is a reality in our economy, that the American dream remains alive."

Volcker had been advising Obama on the economy for many months, even during the course of his election campaign and had advised him to back Paulson's plea for the $700- billion bailout fund.

Obama had also thought of making Volcker the treasury secretary but later changed his mind and asked him to lead the Economic Recovery Advisory Board, which has been set up to advise the president-elect on how to put the US economy back on track.

''This board will provide that fresh perspective to me and my administration, with an infusion of ideas from across the country and from all sectors of our economy, input that will be informed by members' first-hand observations of how our efforts are impacting the daily lives of our families,'' Obama said.

He added that soon he would appoint more members to the board in the next few weeks and wanted this board to be candid in its opinions and assessments.

Volcker's appointment is crucial as it comes during a week when the US government has pumped in another $800 billion (about Rs40 lakh crore) more into the economy to ease the mortgage and consumer credit market crisis and arrest the alarming downturn. (See: US government unveils $800 billion second stimulus plan) 

With the US government's bailout bill so far touching $1.5 trillion and likely to go up to $2 trillion with an expected announcement of a $500-billion tax cut plan, analysts fear that inflation is bound to rise and Volker's appointment will be invaluable as he is known to have been successful in bringing down inflation during the '70s.

Volcker, was one among the few who had warned of the credit market collapse and disapproved of the government bailing out financial institutions. Volker had said that the Federal Reserve was an independent agency whose purpose was to supply liquidity to the economy and fight inflation, not to bail out individual sectors from bad loans.

Last month, Volcker said that the US was in for a prolonged and tough recession. He aid that the groundwork for 20 years of growth was established in the early 1980's while dealing with inflation and said that he would like to repeat it this time around, as well.

Volcker, who holds economics degrees from both Princeton and Harvard, was the prime architect of removing fixed exchange rates and letting the dollar float against other currencies in 1971 as under secretary of the treasury during President Nixon's term.

The six foot seven inch Volcker is a generation ahead of President-elect Obama and is known for his tough talk and frank opinions who does not hesitate in taking unpopular decision, regardless of politics.

After his stint at the Fed, Volcker has worked with an advisory firm and headed investigations on corruption in the UN's oil-for-food programme with Iraq, the Enron- accounting scandals and on determining if certain unclaimed Swiss bank accounts belonged to victims of the Nazi holocaust.