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Know your alumni - Raghuram Rajan |
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B Tech EE, 1985, IIT Delhi |
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Note: This section will highlight IITians who have contributed significantly to their chosen fields. Please feel free to forward notes about alumni you know who should be featured here to webmaster@iitdef.org. If you wonder about the recent dividend tax cut and Bechtel's Iraq contracts - think "crony capitalism" - and Raghuram has written the book about it. He was also the SAC general secretary at IIT. Creating an example for his brother, Mukund, who too came to IIT Delhi after Raghu graduated in 1985.
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Raghuram G. Rajan obtained his B. Tech. (EE) from IIT/D in 1985. Then he received MBA from IIM Ahmedabad in 1987, and Ph.D. from MIT Sloan School in 1991. He joined the University of Chicago as an Assistant Professor of Finance in 1991, and was directly promoted to full professor in 1995. Currently, he is Joseph L. Gidwitz Professor of Finance at the University of Chicago.
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Raghuram Rajan |
Raghuram Rajan has been awarded the inaugural Fischer Black Prize from the American Finance Association in January 2003. The prize, modeled along the lines of the Fields Medal in mathematics and the Clark Medal in economics, will be awarded biannually to recognize outstanding contributions to the field of finance by a person under age 40. The prize was established in honor of Fischer Black, who was a co-inventor of the Nobel-prize winning Black-Scholes-Merton options-pricing model.
In announcing the award in January, George Constantinides, the Leo Melamed Professor of Finance in the GSB and chairman of the prize selection committee, said the committee unanimously chose Rajan. “Broadly speaking, Rajan’s work examines the role of institutions in finance and their effects on economic growth,” said Constantinides. “Specifically, he has made path-breaking contributions to our knowledge of financial institutions, the workings of the modern corporation, and the causes and consequences of the development of the financial sector across countries.”
Rajan’s Ph.D. thesis pointed out the downside to cozy bank-firm relationships long before these became apparent in detailed studies of systems like Japan’s. His recent theoretical work with Douglas Diamond, the Merton H. Miller Distinguished Service Professor of Finance in the GSB, knits together the microtheory of banking with macroeconomic theory. Their research promotes greater understanding of the role banks play in the provision of liquidity, why this function makes banks so prone to systemic crises, and why changes in monetary policy have such a significant effect on bank lending. |
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Rajan’s current work with Luigi Zingales, the Robert C. McCormack Professor of Entrepreneurship and Finance in the GSB, details the importance of a good financial system for economic growth. In their forthcoming book, Saving Capitalism from the Capitalists, Rajan and Zingales argue that the reason why so many countries have underdeveloped financial systems despite their undoubted importance is because of the political opposition of elites who fear freeing up access to finance.
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Note: This description is taken from an electronic News Letter from University of Chicago.
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Read about other role models - Madhu Sudan
 
The IITDEF's goal is to build a network of IITians across the globe, and to help fund and promote education and research among students of IIT Delhi
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