How does an IIT boy become one of the biggest names in economics? In a way, Raghuram Rajan’s story illustrates the dramatic rise of a brilliant, IIT educated engineer; in another, it is an increasingly common story about the superlative competence of an IIT student in whatever field he wishes to apply himself to.
The IITian.com traces this fascinating career path, from the classrooms of IIT Delhi in the 80′s, to the halls of power within two decades.
Born to a family with an IFS (Indian Foreign Service) officer, Rajan’s childhood was spent in schools in Sri Lanka, Indonesia, and Belgium. After his return to India, he spent the rest of his school years in the acclaimed Delhi Public School, graduating right into one of the top colleges in the country – IIT Delhi.
At IIT Delhi he majored in Electrical Engineering, eventually earning a gold medal for his outstanding performance, a feat he repeated a couple of years later at IIM Ahmadabad studying Business Administration. In a way, his academic performance in quite similar to D. Subbarao, who also obtained the gold medal while at IITKgp and topped the Civil Services Exam – both are exemplary.
After IIM, Rajan obtained a Ph.D in management from MIT, for his thesis “Essays on Banking.” His next stop was as a professor at the University of Chicago, an august institution with a profound history of contributions towards economics (and especially Macroeconomics.) Interestingly enough, the kind of macroeconomics practiced in UoC, a so-called freshwater school, was quite different from that in MIT, a saltwater institution. The manner in which he excelled at both just showcases, once again, the sheer versatility of his intellect.
In 2003 Rajan was appointed the youngest chief-economist at the International Monetary Fund, a post he held till 2006. That year he also was also awarded two substantial prizes: the Fischer Black Prize for contributions to the theory and practice of finance by an economist under age 40, and the 5th Deutsche Bank Prize in Financial Economics.
In 2005 Rajan read the famous paper “Has Financial Development Made the World Riskier” that predicted the 2008 collapse at a celebration honoring Alan Greenspan. Post-Crisis, it was this one paper that catapulted him to world-wide fame. At the time, however, he was dismissed as misguided and “luddite”.
In 2008 Rajan was appointed as Honorary economic adviser by the Prime Minister of India. In 2012, he replaced Kaushik Basu as the Chief Economic Adviser to the Ministry of Finance.
And on 4th of September, 2013, he became the second-youngest Governor of the Reserve Bank of India.