Raghuram Rajan: The Financial Genius & Indian Economist

Raghuram Rajan

Raghuram Rajan: Education, Books, Net Worth, as RBI Governor

Raghuram Govind Rajan is an Indian citizen and holds a USA Green Card. He is the Katherine Dusak Miller Distinguished Service Professor of Finance at the University Of Chicago Booth School Of Business. He is the 23rd Governor of the RBI – Reserve Bank of India, and Indian economist.

He was chief Economist and Director of Research at the International Monetary Fund during 2003 to 2006. He was the 23rd Governor of the Reserve Bank of India during September 2013 to 2016.

He became the Vice-Chairman of the Bank for International Settlements during his tenure in 2015.

He informed about the growing risks in the financial system and proposed policies that would reduce such risks at the Federal Reserve annual Jackson Hole conference in 2005.

Former U.S. Treasury Secretary Lawrence Summers called the notifications “misguided”. After the financial crisis of 2007-08, Rajan’s views came to be prescient.

In 2010, he interviewed extensively for the Academy Awards-winning documentary Inside Job. He received the inaugural Fischer Black Prize in 2003.

American Finance Association gave it to the financial economist younger than 40 who has made the most significant contribution to the theory and practice of finance.

In 2010, Rajan’s book Fault Lines: How Hidden Fractures Still Threaten the World Economy, won the Financial Times/Goldman Sachs Business Book of the Year award.

In 2016, his name was in the list of the ‘100 Most Influential People in the word’. Rajan was born on 3rd February 1963, in Bhopal, Madhya Pradesh to a Tamil Brahmin Iyengar family.

His father R Govindrajan assigned to the Intelligence Bureau. In 1970, his father was posted in Sri Lanka; there Rajan missed a year of his school due to political turmoil.

In 1974, Rajan’s family returned to India. Throughout his childhood, he presumed his father as a diplomat, because the whole family used to travel on diplomatic passport.

During 1974 to 1981, he attended to Delhi Public School at R. K. Puram. Then he enrolled at Indian Institute of Technology Delhi for a bachelor’s degree in electrical engineering in 1981.

He headed the Student Affairs Council in the final (fourth) year of his degree. He graduated in 1985 & was awarded with the Director’s Gold Medal as the best all-round student.

He received a Master of Business Administration from the Indian Institute of Management Ahmedabad in 1987.

As a management trainee, he joined the Tata Administrative Services. After a few months, he left it & joined the doctoral program at the Sloan School of Management at Massachusetts Institute of Technology.

He received a PhD for his thesis titled Essays on Banking under the supervision of Stewart Myers in 1991.

In 2012, the London Business School awarded him an honorary doctorate degree. In 2015, the Hong Kong University of Science and Technology & in 2019, Université catholique de Louvain also awarded him an honorary doctorate.

He is an Indian citizen with a USA Green Card. He got married to Radhika Rajan. She teaches at University of Chicago Law School.

Radhika is also an Adjunct Associate Professor of Behavioral Science at the University Of Chicago Booth School Of Business. The couple have 2-children, one son & one daughter.

In 1991, Raghuram Rajan joined Booth School of Business at the University of Chicago as an assistant professor of finance.

Then he became a full time professor in 1995. As a visiting faculty he taught at Kellogg School of Management, MIT Sloan School of Management, Stockholm School of Economics & and Indian School of Business.

He wrote on a large scale on banking, international finance, growth and development, corporate finance & organisational structures.

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At Project Syndicate, he is a regular contributor. Rajan has collaboration with Douglas Diamond to produce much-cited work on banks, and their interlinkages with macroeconomic phenomena.

He worked with Luigi Zingales on the effect of institutions on economic growth. In 2003, Rajan & Zingales together published Saving Capitalism from the Capitalists.

In 2010, his book ‘Fault Lines: How Hidden Fractures Still Threaten the World Economy’ led to the financial crisis of 2007–2008.

As of Rajan widening income inequality in the US, trade imbalances in the global economy, and the clash between arm’s length financial systems, were responsible for bringing about the crisis.

His book received the Financial Times and Goldman Sachs Business Book of the Year Award. In 2003, the American Finance Association awarded him with Fischer Black Prize.

He was awarded for his for his “path-breaking contributions to our knowledge of financial institutions, the workings of the modern corporation, and the causes and consequences of the development of the financial sector across countries.”

In 2009, Rajan became a member of the American Academy of Arts and Sciences. Raghuram Rajan served as the president of the American Finance Association in 2011.

Rajan is one of the members of the Group of Thirty international economic body. Since 1998, he served as a founding member of the academic council of the Indian School of Business.

It is said that Raghuram Rajan denied the extension as RBI Governor due to serious differences with the Government of India.