World’s Best B-School Professors: Raghuram Rajan
Booth School of Business
Claim to Fame: Financial Economist
Massachusetts Institute of Technology, PhD
Indian Institute of Management, MBA
At Booth Since: 1991
Fun Fact: After four years as an assistant professor he skipped the typical move to associate professor and received tenure as a full professor.
If you weren’t teaching, what would be your dream job?
It is hard to imagine anything that is equally interesting and that gives one so much satisfaction. My guess, though, is that the human being has a tremendous capacity to rationalize what they are doing. So if I had taken up any of my earlier “dream” jobs – fighter pilot (as a child), official in the World Bank (as an undergrad), or an activist in a Non-Government Organization (as a Ph.D. student) – I might be equally happy.
What do you like most about your current job?
You have a wide variety of experiences, ranging from the classroom to the boardroom. You communicate with a wide audience. You learn constantly. You have great flexibility. You feel you are making a difference. And someone actually pays you to do it.
What do you like least?
Very little to dislike, so it would be nit-picking if I highlight the few small discomforts in an otherwise perfect job.
What does it take to excel as professor at a business school?
I don’t know that there is a single recipe. I personally find it satisfying to do a variety of things – to teach both MBAs and PhD students, to do research, to write for a wider audience, to give public speeches, to work with corporations, and to participate in policy debates. Each activity helps enrich what I bring to the others, and helps my overall contribution to the business school. At the same time, there are perfectly good alternatives – some people contribute by focusing on research alone, while others are star teachers, and yet others make a solid career in academic administration. A business school needs professors of all kinds to be a great school.
Raghuram Rajan’s list of distinguished appointments easily demonstrates his clout as a financial economist.
Exhibit A: He is the Chief Economic Advisor to the Indian government, a post awarded this past August after serving India’s Prime Minister as honorary economic advisor since 2008.
Exhibit B: From 2003 to 2006, he served as chief economist at the International Monetary Fund while taking a brief leave from the Booth School.
Exhibit C: Rajan is also the current president of the American Finance Association.
Professor Rajan has earned these and other similar titles due to his insights into a wide swath of the economy: banking, corporate finance, and the role of finance in economic development. He is widely credited for the warning signs he posed in the years leading up to the economic collapse in the U.S. Specifically looking at the banking industry, Professor Rajan took a gutsy stand when he explicitly outlined the threats posed by a banking industry that lacked effective risk management.
Now in the aftermath of a systemic breakdown of the U.S. economy, Rajan’s most recent book, Fault Lines: How Hidden Cracks Still Threaten the World Economy, won the Financial Times Business Book of the Year award in 2010. Through this book and other outlets, Rajan continues to address the causes of the economic breakdown and offers up proposed remedies to get us back on the right track. Rajan’s interests outside of financial economics include tennis, squash, history, and Indian politics.
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