Raghuram Rajan resumes academic role at Chicago Booth School

Former RBI governor Raghuram Rajan will teach international corporate finance at the University of Chicago Booth School of Business


Former RBI governor Raghuram Rajan. Photo: Abhijit Bhatlekar/Mint
Former RBI governor Raghuram Rajan. Photo: Abhijit Bhatlekar/Mint

New York: Former Reserve Bank of India (RBI) governor Raghuram Rajan has resumed his role as “Distinguished Service Professor of Finance” at the University of Chicago Booth School of Business and will teach international corporate finance there in the winter of 2017.

Giving details of Rajan’s course schedule for 2016-17, Chicago Booth School said this course will explore the challenges of corporate finance and investment in a more integrated global economy.

“How should one optimally organize the location of production, control, and financing? What kinds of new concerns emerge when the whole world, rather than just one’s domestic economy, become the arena of decision making?

“How does decision-making depend on the environment one is doing business in? Most students will see this as an alternative to the case course in corporate finance, but some could see it as a complement,” the Chicago Booth School said about Rajan’s course.

Rajan, who stepped down as the RBI governor on 4 September, in an 18 June letter to central bank staff had said he would return to academia after leaving RBI.

He was “on leave” from Chicago University, with which he has been associated since 1991, during his tenure at RBI. Rajan had in that letter had said his “ultimate home is in the realm of ideas”. He has also said he would be back in India for lectures and other public events after a “break”.

The Chicago Booth School has listed Indian politics among Rajan’s interests, besides tennis, squash and history. The school said the format Rajan’s course would include discussions, case studies and “ethics discussion/comment”.

“The course will be based on a set of readings and cases... Grades will be based on class participation, case write-ups, and an exam,” it added.

The business school has also named two upcoming publications of Rajan—one on the corporation in finance and the other jointly with Douglas Diamond on “Illiquid banks, Financial Stability, and Interest Rate Policy”.

As per Chicago Booth School, Rajan’s research interests are in banking, corporate finance, and economic development, especially the role finance plays in it.

Rajan, who is credited to have predicted the global financial crisis of 2008, is also a member of the Group of Thirty and was President of the American Finance Association in 2011 and is a member of the American Academy of Arts and Sciences. Between 2003 and 2006, Rajan had served as chief economist and director of research at the International Monetary Fund (IMF).

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