Rajan announced his plan to return to academia in June 2016
As the US President Donald Trump is expected to announce the new chief of Federal Reserve, a top US magazine has come up pitching for former Reserve Bank of India (RBI) governor Raghuram Rajan.
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Barrons magazine, in an article, pointed out that Rajan could be the suitable person to lead the central bank of the US. Calling Rajan a “star among the world’s central bankers,” Barrons asked: “If sports teams can recruit the best talent from around the globe, why not central banks?”
“Nowhere on the short list of potential candidates to lead the Federal Reserve is the current star among the world’s central bankers—someone who oversaw a sharp drop in inflation, the stabilization of a currency, and a 50% jump in stock prices,” noted the article, adding that more importantly “his was a lonely but prescient voice warning of a financial crisis resulting from excessive risk-taking in credit derivatives—years before it hit.”
There is a precedence of noncitizens leading central banks like Canadian-born Mark Carney who was the chief of the Bank of England. Barrons suggests such a move from the Trump administration to appoint one of the prominent figures among economic gurus in the world.
Born in 1963 in Bhopal, Madhya Pradesh, Rajan was credited for predicting the global financial crisis in 2008 well in advance in 2005 itself, thus suggesting the amount of understanding of the global economic and financial system.
An alumnus of the prestigious Indian Institute of Management – Ahmedabad and Indian Institute of Technology – Delhi, Rajan is holding a doctorate from the Massachusetts Institute of Technology (MIT). His stint in International Monetary Fund (IMF) as its Chief Economist has given him experience in the monetary policies being practiced by different countries. He has also served as the president of the American Finance Association.
Rajan was appointed as the governor of the central bank of India by the then United Progressive Alliance (UPA) government when India was facing some serious economic issues in 2013.
During his tenure, Rajan made curbing inflation his primary focus, bringing down retail inflation from 9.8 percent in September 2013 to 3.78 percent in July 2015, the lowest since the 1990s. But, he didn’t get a second term under Modi government. He had a controversy-ridden tenure in RBI as he faced severe criticism from some political quarters including personal attacks.
Rajan announced his plan to return to academia in June 2016 and said that he will not serve a second term as RBI governor. He returned to the University of Chicago, where he had taught until 2003 after his term as RBI governor came to an end.