Raghuram Rajan

Raghuram Rajan has been the Economic Counselor and Director of Research at the International Monetary Fund since 2003. He graduated from IIT Delhi in 1985 with a B.Tech in Electrical Engineering and I.I.M. Ahmedabad in 1987. He joined the Graduate School of Business (GSB), University of Chicago in 1991 after obtaining a Ph.D. from MIT. In 1994, he was voted tenure and appointment as Professor of Finance and is now the Joseph L. Gidwitz Distinguished Service Professor of Finance at the GSB. Dr. Rajan’s research interests focus primarily on economic institutions ranging from banks to property rights. His papers have been published in all the top economics and finance journals, and he has served on the editorial board of the American Economic Review and the Journal of Finance. He has also written a book with Luigi Zingales entitled Saving Capitalism from the Capitalists, which was published by Random House in February 2003. In January 2003, the American Finance Association awarded Dr. Rajan the inaugural Fischer Black Prize, given every two years to the financial economist under age 40 who has made the most significant contribution to the theory and practice of finance.

Papers Published in World Economics:

Making Capitalism Work for Everyone

There is a widespread belief that free markets do not benefit the common person, let alone the poor: they are only an instrument for the rich to get richer. Not only is this belief false, but in fact the opposite is true. Free markets are the single most important tools to eliminate poverty and spread opportunity. The problem is that people do not distinguish enough between true free market capitalism, which implies competition and equal access, and the failed version experienced in many countries where powerful elites protect their position by denying fair access to markets. Particularly in developing countries, ordinary people never see the benefits of properly working capitalism. To make them work for all, markets need political support to provide the right amount of rules and regulations that will allow them to flourish; a government that is not too interventionist and not too laissez-faire. While there is no single proposal that will preserve the system of free enterprise from its enemies, the authors suggest three mutually reinforcing broad policy objectives: keep borders open to the flow of goods and capital; encourage the transfer of productive assets into efficient hands; and maintain safety nets focused on individuals.

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