Raghuram Rajan, a professor of finance at the University of Chicago Booth School of Business, has been named the Indian government’s Chief Economic Adviser, the school announced today. Rajan will continue to be associated with the school and university, while restructuring his academic commitments to meet his responsibilities in India.
Since 2008, he has been an honorary economic adviser to Prime Minister Manmohan Singh while he continued teaching and doing research at Booth full time.
"The post-crisis world has been challenging for all countries, and India is no exception. I look forward to working to address the important issues it faces," Rajan said. "And I am pleased that I will be able to reorganize my duties at Booth to allow me to undertake these new responsibilities."
At Booth, he teaches an MBA course in international corporate finance and a Ph.D. course in the theory of financial decisions.
Rajan chaired the Indian government’s Committee on Financial Sector Reforms in 2007 and 2008, and he was economic counselor and director of research for the International Monetary Fund from 2003 to 2006.
"I speak for our students and my colleagues on the faculty when I say we are delighted that Professor Rajan will be advising the Indian government. His experiences there will, no doubt, be invaluable for our students," said Sunil Kumar, dean of the school.
Rajan's new position in the Indian government is similar to a post that Austan Goolsbee, another Booth professor, held in the administration of President Barack Obama. Goolsbee was chairman of the President’s Council of Economic Advisers from 2010 to 2011.
Rajan's research interests are in banking, corporate finance and economic development, especially the role of finance in economic development. His academic papers have been published in all the top economics and finance journals. Rajan was president of the American Finance Association in 2011.
Before the financial crisis struck, Rajan presented his research paper titled "Has Financial Development Made the World Riskier?" at the Jackson Hole Conference organized by the Federal Reserve Bank of Kansas City in 2005. In the paper, he concluded that serious risks to the financial system do exist, and he proposed policies that would reduce those risks.
Rajan's recent book, "Fault Lines: How Hidden Fractures Still Threaten the World Economy," won the Financial Times/Goldman Sachs Business Book of the Year award in 2010, and he won the Infosys Prize for Economic Sciences.
Rajan received the inaugural Fischer Black Prize, given every two years to the financial economist younger than 40 who has made the most significant contribution to the theory and practice of finance.
He joined the Booth faculty in 1991 after he received a Ph.D. from the Massachusetts Institute of Technology. Earlier, he received an MBA from the Indian Institute of Management in Ahmedabad and an undergraduate degree from the Indian Institute of Technology in New Delhi.
His academic title at Booth is Eric J. Gleacher Distinguished Service Professor of Finance.