Raghuram Rajan

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In this Indian name, the name Govind Rajan is a patronymic, not a family name, and the person should be referred to by the given name, Raghuram.
Raghuram Rajan
Raghuram Rajan, IMF 69MS040421048l.jpg
Dr Raghuram G Rajan in 2004
23rd Governor of Reserve Bank of India
In office
4 September 2013 – 4 September 2016
Preceded by Duvvuri Subbarao
Succeeded by Urjit Patel
Personal details
Born (1963-02-03) 3 February 1963 (age 54)
Bhopal, Madhya Pradesh
Nationality Indian [1]
Spouse(s) Radhika Puri
Alma mater IIT Delhi (BTech)
IIM Ahmedabad (PGDBM)
MIT Sloan School of Management (PhD)

Raghuram Govind Rajan (born 3 February 1963) is an Indian economist who is the Katherine Dusak Miller Distinguished Service Professor of Finance at the University of Chicago Booth School of Business.[2][3] He was the 23rd Governor of the Reserve Bank of India between September 2013 and September 2016.[2] Between 2003 and 2006, Rajan was the Chief Economist and Director of Research at the International Monetary Fund.[2] In 2015, during his tenure at the Indian Reserve Bank he also became Vice-Chairman of the Bank for International Settlements.[4]

At the Federal Reserve annual Jackson Hole conference in 2005, Rajan warned about the growing risks in the financial system and proposed policies that would reduce such risks. Former U.S. Treasury Secretary Lawrence Summers called the warnings “misguided” and Rajan himself a "luddite".[5] However, following the 2008 economic crisis, Rajan's views came to be seen as prescient and he was extensively interviewed for the Oscar-winning documentary Inside Job (2010).

In 2003 Rajan received the inaugural Fischer Black Prize, given every two years by the American Finance Association to the financial economist younger than 40 who has made the most significant contribution to the theory and practice of finance. His 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. In 2016, he was named by Time (magazine) in its list of the ‘100 Most Influential People in the World’.[6][7]

Early life and education[edit]

Raghuram Rajan was born on 3 February 1963 in Bhopal, Madhya Pradesh[8][9] into a Tamil family.[10] He is the third of four children of R Govindarajan, an Indian Police Service officer who topped his 1953 batch.

Assigned to the Intelligence Bureau, R Govindarajan was posted to Indonesia in 1966. In 1968 he joined the newly created external intelligence unit of the Intelligence Bureau, the Research and Analysis Wing (R&AW) where he served as staff officer under spymaster R. N. Kao and became part of the "Kaoboys". In 1970 he was posted to Sri Lanka, where Raghuram Rajan missed school one year because of political turmoil. After Sri Lanka, R Govindarajan was posted to Belgium where the children attended a French school. In 1974 the family returned to India.[8] Throughout his childhood, Rajan presumed his father to be a diplomat since the family traveled on diplomatic passports.[11]

From 1974 to 1981 Rajan attended Delhi Public School, RK Puram,[12][13] In 1981 he enrolled at Indian Institute of Technology, Delhi for a bachelor's degree in electrical engineering. In the final year of his four-year degree, he headed the Student Affairs Council. He graduated in 1985 and was awarded the Director's Gold Medal as the best all-round student. In 1987, he earned a Post Graduate Diploma in Business Administration from the Indian Institute of Management Ahmedabad where he was a gold medalist. After graduation, he joined Tata Administrative Services as a management trainee but left after a few months to join the doctoral program in management at the MIT Sloan School of Management.[8] In 1991, he received a PhD for his thesis titled Essays on Banking.[14] Rajan's research interests were in banking, corporate finance, and economic development, especially the role finance plays in it.

In 2012, he was awarded honorary doctorate degree by London Business School and in 2015, was again awarded honorary doctorate degree by Hong Kong University of Science and Technology



Rajan served as Visiting Professor at Stockholm School of Economics (1996 to 1997) and at Kellogg School of Management (1996 to 1997). He also served as Visiting Professor at MIT Sloan School of Management (2000 to 2001).

In 1991, Rajan joined the Booth School of Business at the University of Chicago and went on to become a Professor of Finance there. In 2003, he taught an MBA course in international corporate finance and a PhD course in the theory of financial decisions.

In November 2008, Indian Prime Minister Dr Manmohan Singh appointed Rajan as an honorary economic adviser. That same year, a high-level committee on financial reforms, headed by Rajan, submitted its final report to the Planning Commission.[15] He chaired the Indian Government’s Committee on Financial Sector Reforms (2007-2008).

In 2009, he became a member of the American Academy of Arts and Sciences. In 2011, he served as President of the American Finance Association. In 2012, he became a member of the Group of Thirty.

Policy Making[edit]

Raghuram Rajan meeting Prime Minister Narendra Modi in 2014.

International Monetary Fund[edit]

From October 2003 to December 2006 he served as Chief Economist at the International Monetary Fund (IMF).

Chief Economic Adviser of India[edit]

On 10 August 2012 Rajan was appointed as chief economic adviser to India's Ministry of Finance, succeeding Kaushik Basu.[16] He prepared the Economic Survey for India for the year 2012–13.

Reserve Bank of India[edit]

On 6 August 2013 it was announced that Rajan would take over as the next Reserve Bank of India Governor for a term of 3 years, succeeding Duvvuri Subbarao.[17] On 5 September 2013 he took charge as the 23rd Governor of the Reserve Bank of India, at which point he took a leave of absence from the University of Chicago Booth School of Business.[18]

In his first speech as RBI governor, Rajan promised banking reforms and eased curbs on foreign banking, following which the BSE SENSEX rose by 333 points or 1.83%. After his first day at office, the rupee rose 2.1% against the US dollar. As Governor of the RBI, Rajan made curbing inflation his primary focus, bringing down retail inflation from 9.8% in September 2013 to 3.78% in July 2015 – the lowest since the 1990s. Wholesale inflation came down from 6.1% in September 2013 to a historic low of -4.05% in July 2015. Under Rajan, the RBI adopted consumer price index (CPI) as the key indicator of inflation, which is the global norm, despite the government recommending otherwise. Foreign exchange reserves of India grew by about 30% to the tune of $380 billion in two years. Under Rajan, the RBI has licensed two universal banks and approved eleven payments banks to extend banking services to the nearly two-thirds of the population who are still deprived of banking facilities.

In 2014 it was suggested[by whom?] that Rajan could take over from Christine Lagarde as head of the IMF when his term expires in 2016.[19] On 9 November 2015, Rajan was appointed as Vice-Chairman of the Bank for International Settlements (BIS).[20]

On 18 June 2016, Rajan announced that he will not be serving a second term as RBI Governor, and plans to return to academia.[21]

Economic and political views[edit]

Rajan advocates giving financial markets a greater role in the economy. In the book Saving Capitalism from the Capitalists: Unleashing the Power of Financial Markets to Create Wealth and Spread Opportunity[22] co-authored with Luigi Zingales, the two authors argue in favour of deregulated financial markets in order to facilitate access of the poor to finance: "Capitalism, or more precisely, the free market system, is the most effective way to organise production and distribution that human beings have found … healthy and competitive financial markets are an extraordinarily effective tool in spreading opportunity and fighting poverty. …Without vibrant, innovative financial markets, economies would ossify and decline." (p  1)

In 2005, at a celebration honouring Alan Greenspan, who was about to retire as chairman of the US Federal Reserve, Rajan delivered a controversial paper that was critical of the financial sector.[23] In that paper, "Has Financial Development Made the World Riskier?", Rajan "argued that disaster might loom."[24] Rajan argued that financial sector managers were encouraged to "take risks that generate severe adverse consequences with small probability but, in return, offer generous compensation the rest of the time. These risks are known as tail risks. But perhaps the most important concern is whether banks will be able to provide liquidity to financial markets so that if the tail risk does materialise, financial positions can be unwound and losses allocated so that the consequences to the real economy are minimised."

The response to Rajan's paper at the time was negative. For example, former U.S. Treasury Secretary and former Harvard President Lawrence Summers called the warnings “misguided” and Rajan himself a "luddite".[25] However, following the 2008 economic crisis, Rajan's views came to be seen as prescient; by January 2009, The Wall Street Journal proclaimed that now, "few are dismissing his ideas."[24] In fact, Rajan was extensively interviewed on the global crisis for the Academy Award-winning documentary film Inside Job. Rajan wrote in May 2012 that the causes of the ongoing economic crisis in the US and Europe in the 2008–2012 period were substantially due to workforce competitiveness issues in the globalisation era, which politicians attempted to "paper-over" with easy credit. He proposed supply-side solutions of a long-term structural or national competitiveness nature: "The industrial countries should treat the crisis as a wake-up call and move to fix all that has been papered over in the last few decades... Rather than attempting to return to their artificially inflated GDP numbers from before the crisis, governments need to address the underlying flaws in their economies. In the United States, that means educating or retraining the workers who are falling behind, encouraging entrepreneurship and innovation, and harnessing the power of the financial sector to do good while preventing it from going off track. In southern Europe, by contrast, it means removing the regulations that protect firms and workers from competition and shrinking the government's presence in a number of areas, in the process eliminating unnecessary, unproductive jobs."[26]

During May 2012, Rajan and Paul Krugman expressed differing views on how to reinvigorate the economies in the US and Europe, with Krugman mentioning Rajan by name in an opinion editorial. This debate occurred against the backdrop of a significant "austerity vs stimulus" debate occurring at the time, with some economists arguing one side or the other or a combination of both strategies.[27][28][29] In an article in Foreign Affairs magazine, Rajan advocated structural or supply-side reforms to improve competitiveness of the workforce to better adapt to globalisation, while also supporting fiscal austerity measures (E.g., raising taxes and cutting spending), although he conceded that austerity could slow economies in the short-run and cause significant "pain" for certain constituencies.[26][30] Krugman rejected this focus on structural reforms combined with fiscal austerity. Instead he advocated traditional Keynesian fiscal (government spending and investment) and monetary stimulus, arguing that the primary factor slowing the developed economies at that time was a general shortfall in demand across all sectors of the economy, not structural or supply-side factors that affected particular sectors.[31]

In a 2014 interview, Rajan said his major targets as governor of the Reserve Bank of India were to lower inflation, increase savings and deepen financial markets, of which he believed reducing inflation was the most important. A panel he appointed proposed an inflation target for India of 6% for January 2016 and 4% (+-2%) thereafter.[19] In addition to his work at the University of Chicago and RBI, Raghuram is also a member of the Berggruen Institute's 21st Century Council.[32]


  • In 2003, Rajan won the inaugural Fischer Black Prize awarded by the American Finance Association for contributions to the theory and practice of finance by an economist under age 40.[33]
  • In February 2010 NASSCOM named him Global Indian at its 7th annual global leadership awards.[34]
  • In 2010, he was awarded the Financial Times and McKinsey Business Book of the Year Award, Fault Lines: How Hidden Fractures Still Threaten the World Economy.[35]
  • In November 2011 he received the Infosys Prize for Social Sciences – Economics for his work in analyzing the contribution of financial development to economic growth, as well as the potentially harmful effects of dysfunctional incentives that lead to excessive risk-taking.[36]
  • In 2013, he was awarded the fifth Deutsche Bank Prize in Financial Economics for his "ground-breaking research work which influenced financial and macro-economic policies around the world".[37]
  • In 2014, he was conferred the Best Central Bank Governor award by Euromoney Magazine.
  • In 2014 He was conferred with the Governor of the Year Award 2014 from London-based financial journal Central Banking.[38][39]


Personal life[edit]

Raghuram Rajan is an Indian citizen, but holds a US Green Card.[44] He is married to Radhika Puri Rajan, whom he met while they were both students at IIM Ahmedabad. Radhika teaches at University of Chicago Law School. She is also an Adjunct Associate Professor of Behavioral Science at the University of Chicago Booth School of Business. They have a daughter and a son.

Rajan's elder brother works for a solar company in the United States. Rajan's sister is married to an Indian Administrative Service officer and is a French teacher in New Delhi. Rajan's younger brother, Mukund Rajan, was born in Chennai in 1968.[8] He is the Brand Custodian and Chief Ethics Officer of Tata Sons[45][46][47]

Rajan is a vegetarian. He likes the outdoors and plays tennis and squash.[11][19] He enjoys reading Tolstoy, J. R. R. Tolkien and Upamanyu Chatterjee.[48] Rajan is an avid quizzer who appeared on national television with some of his friends in 1980s. He has also participated in various marathons, such as the Standard Chartered Mumbai Marathon 2015.[49]


  1. ^ "I am an Indian citizen: Raghuram Rajan". October 30, 2013.  Quote: "I am an Indian citizen. I have always been an Indian citizen. I always held an Indian passport. I held an Indian diplomatic passport when my father was in the foreign service and when I travelled on behalf of the Ministry of Finance.I have never applied for the citizenship of another country. I have never been a citizen of another country and have never taken a pledge of allegiance to another country."
  2. ^ a b c "Raghuram G. Rahan: Katherine Dusak Miller Distinguished Service Professor of Finance". University of Chicago, Booth School of Business. Retrieved 18 March 2017. 
  3. ^ "Faculty members recognized with named, distinguished service professorships". University of Chicago Booth School of Business. Retrieved 2 February 2017. 
  4. ^ "RBI Governor Raghuram Rajan first Indian to be appointed BIS Vice Chairman". The Economic Times. Retrieved 2 February 2017. 
  5. ^ Lahart, Justin (2 Jan 2009). "Mr. Rajan Was Unpopular (But Prescient) at Greenspan Party". The Wall Street Journal. 
  6. ^ Raghuram Rajan in TIME's 100 most influentials list Business Standard, April 22, 2016
  7. ^ Raghuram Rajan, Sania Mirza, Sundar Pichai Among Time Magazine's 100 Most Influential People Huffington Post, April 22, 2016
  8. ^ a b c d Mark Bergen (1 October 2013). "Line of Credit: Raghuram Rajan takes charge at the RBI". Caravan Magazine. Retrieved 19 Feb 2016. 
  9. ^ Singh, Mammohan (4 February 2014) 7 Interesting facts about 23rd RBI Governor Raghuram Rajan Daily Bhaskar, Retrieved 11 November 2014
  10. ^ Crabtree, James (30 August 2013) Raghuram Rajan, academic in a raging storm The Financial Times (requires a subscription), Retrieved 11 November 2014
  11. ^ a b Crabtree, James (15 August 2014) Lunch with the FT: Raghuram Rajan The Financial Times, Retrieved 11 November 2014
  12. ^ "Didn't own a blazer in school, Raghuram Rajan tells students". Press Trust of India. The Hindu. 24 January 2014. Retrieved 19 Feb 2016. 
  13. ^ "The roots of Recession" Quote: "Raghuram Rajan has always been a little precocious. Arguably the most famous alumnus of Delhi Public School, R.K. Puram. he was one of the youngest professors at Chicago's Booth School of Business, and, at 40, the youngest chief economist of the International Monetary Fund."[1]
  14. ^ "DSpace@MIT: Essays on banking
  15. ^ Sanjiv Shankaran et al. "Raghuram Rajan is adviser to PM". Mint. 4 November 2008. Retrieved on 18 August 2012.
  16. ^ "Raghuram Rajan appointed as new CEA. The Hindu. August 11, 2012. Retrieved on 18 August 2012.
  17. ^ Raghuram Rajan in RBI's new Guv list. The Indian Express. May 20, 2011
  18. ^ "Chicago Booth professor Raguhram Rajan is named Governor of Reserve Bank of India". 6 August 2013.  Quote: "Raghuram Rajan, a professor of finance at the University of Chicago Booth School of Business and the Indian government’s Chief Economic Adviser, has been named Governor of the Reserve Bank of India, the school announced today. While in this post, Rajan will be on leave from the university."
  19. ^ a b c Verma, Sid (October 2014) Rajan’s surgical strikes Euromoney, Retrieved 11 November 2014
  20. ^ "Press release: BIS Board appoints Raghuram Rajan as Vice-Chairman". Bank for International Settlements. 10 November 2015. Retrieved 19 Feb 2016. 
  21. ^ "ET: Raghuram pours cold water on speculations". Economic Times. 18 June 2016. Retrieved 18 June 2016. 
  22. ^ Rajan, R. G., & Zingales, L. (2003). Saving Capitalism from the Capitalists: Unleashing the Power of Financial Markets to Create Wealth and Spread Opportunity. New York: Crown Business.
  23. ^ Raghuram Rajan. "Has Financial Development Made the World Riskier?". National Bureau of Economic Research. 2005. Retrieved on 18 August 2012.
  24. ^ a b Justin Lahart. "Mr Rajan Was Unpopular (But Prescient) at Greenspan Party". Wall Street Journal. 2 January 2009. Retrieved on 18 August 2012.
  25. ^ Paul Krugman. "How Did Economists Get It So Wrong?". The New York Times. 2 September 2009. Retrieved on 18 August 2012.
  26. ^ a b Rajan, Raghuram G. (2012-05-01) Foreign Affairs-Rhaguram Rajan-The True Lessons of the Financial Crisis-May/June 2012. Foreignaffairs.com. Retrieved on 2012-05-16.
  27. ^ Ummelas, Ott. (2012-05-12) Bloomberg-Rehn Rejects ‘False’ Choice Between Austerity, Stimulus-May 2012. Bloomberg.com. Retrieved on 2012-05-16.
  28. ^ Christine Romer-Hey Not So Fast on European Austerity. NY Times. April 28, 2012
  29. ^ Project Syndicate-Michael Spence-The Global Jobs Challenge-October 2011. Project-syndicate.org (2011-10-17). Retrieved on 2012-05-16.
  30. ^ Project Syndicate-Raghuram Rajan-Central Bankers Under Siege-May 2012. Project-syndicate.org (2012-05-08). Retrieved on 2012-05-16.
  31. ^ Paul Krugman Easy Useless Economics. NY Times. May 2012
  32. ^ "Berggruen Institute". Retrieved 5 January 2017. 
  33. ^ "Raghuram G. Rajan: Biographical Information". International Monetary Fund. Retrieved on 18 August 2012.
  34. ^ "NASSCOM announces the 7th Annual Global Leadership Awards". NASSCOM. 8 February 2010. Retrieved 19 Feb 2016. 
  35. ^ "Raghuram G. Rajan (Curriculum Vitae)" (PDF). Booth School of Business. Retrieved 13 August 2015. 
  36. ^ "Infosys Prize / Laureates 2011 / Prof. Raghuram G. Rajan". Infosys Science Foundation. 17 Nov 2011. Retrieved 19 Feb 2016. 
  37. ^ "RBI governor Raghuram Rajan receives Deutsche Bank Prize, 2013". Business Standard. 27 September 2013. Retrieved 27 September 2013. 
  38. ^ (15 October 2014) Raghuram Rajan gets Euromoney's best central bank governor award The Hindu Business Line, Retrieved 11 November 2014
  39. ^ "The winners of the Central Banking Awards 2015 - Central Banking". 
  40. ^ a b Rajan, R.G.: Fault Lines: How Hidden Fractures Still Threaten the World Economy. Press.princeton.edu (2012-04-17). Retrieved on 2012-05-16.
  41. ^ Ovide, Shira (28 October 2010). "The Best Business Book of 2010: 'Fault Lines'". The Wall Street Journal. 
  42. ^ Our Thinking. Goldman Sachs. Retrieved on 2012-05-16.
  43. ^ Business Book Of The Year Award 2010: Longlist announced for the Financial Times and Goldman Sachs | About us | FT.com. Aboutus.ft.com (2010-08-09). Retrieved on 2012-05-16.
  44. ^ "Raghuram Rajan taken aback by query about citizenship". Times of India. Retrieved Oct 29, 2013. 
  45. ^ (4 September 2014) Raghuram Rajan: 10 things to know about the new RBI governor NDTV, Retrieved 11 November 2014
  46. ^ Raman, Kripa (2 September 2013) The new Rajan Mumbai Mirror, Retrieved 11 November 2014
  47. ^ http://www.law.uchicago.edu/faculty/puri.  Missing or empty |title= (help)
  48. ^ Seema Sirohi (21 Jul 2003). "I Doubt, Therefore IMF". Outlook India. Retrieved 19 Feb 2016. 
  49. ^ "Mumbai marathon: Running for glory". India Today. 19 Jan 2015. Retrieved 2 October 2015. 

External links[edit]

Business positions
Preceded by
Kenneth Rogoff
IMF Chief Economist
Succeeded by
Simon Johnson
Preceded by
Kaushik Basu
Chief Economic Adviser
Succeeded by
Arvind Subramanian
Preceded by
Duvvuri Subbarao
Governor of Reserve Bank of India
Succeeded by
Urjit Patel