Raghuram G. Rajan, the former chief economist at International Monetary Fund (IMF), has been named economic advisor to Prime Minister Manmohan Singh. Rajan is presently economics professor at University of Chicago. He served as chief economist at the IMF between 2003 and 2006, and will hold the rank of a secretary in Government of India.
This is a new post that has been created, and PM seems to adding new blood to deal with the financial crisis. In last one month RBI has cut the key interest rates and released Rs 2,65,000 crore into the system to ease the liquidity crunch. But these steps haven't completely addreseed India Inc's woes. Now, it seems, the time has come to get creative and get fresh ideas to tackle the crisis.
This will not Rajan's first brush with Indian government. Earlier he was the chairman of a high-powered committee on financial reforms set up by Prime Minister, which was asked to come up with recommendations to make India a financial powerhouse by the end of next five years. Prior to holding this post, between July 1991 and June 1995, he taught at Chicago University as assistant professor, thereafter became a full-fledged professor.
Rajan secured his doctorate from the Massachusetts Institute of Technology (MIT) in 1991 after an MBA from the Indian Institute of Management, Ahmedabad and a bachelor's degree in electrical engineering from the Indian Institute of Technology, Delhi. He was also a visiting professor of finance at the Kellogg School, Northwestern University, Stockholm School of Economics and Fischer Black visiting professor at MIT's Sloan School of Management. Rajan was awarded the inaugural Fischer Black Prize by the American Finance Association for contributions to finance by an economist under 40, in 2003.
As Economic Counselor and Director of Research at the IMF, his major research focus was on economic growth, and the role finance plays in it. He was the youngest person to hold this position at IMF and also the first from a developing nation. He has also been a director to ISB, Hyderabad and an advisor to SEBI.
He also has worked as a consultant for the Indian Finance Ministry, World Bank, Federal Reserve Board, Swedish Parliamentary Commission, and various financial institutions.
Along with fellow GSB faculty member Luigi Zingales, Rajan has authored the book, Saving Capitalism from the Capitalists. The various research papers he has authored include: "Foreign Capital and Economic Growth" published in 2006 in the Proceedings of the Jackson Hole Conference organized by the Kansas City Fed; "Does Aid Affect Governance?" written with Arvind Subramanian that will appear in the American Economic Review among others.
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