Raghuram Rajan, the Katherine Dusak Miller Distinguished Service Professor of Finance at the University of Chicago Booth School of Business, studies how economic institutions behave under pressure. His research examines how banks, financial markets, and corporations, as well as regulatory institutions and governments, respond to technological disruption, inequality, and political uncertainty.
Drawing on his background in finance, Rajan approaches economic questions from a practical perspective, asking not simply how policy is intended to work, but, he says, “how does it actually work?” By grounding economic theory in the real-world decisions of financial institutions and businesses, his research has challenged conventional wisdom about monetary policy, corporate governance, and financial stability.
After earning degrees from the Indian Institute of Technology Delhi and the Indian Institute of Management Ahmedabad, Rajan completed his doctorate at the Massachusetts Institute of Technology’s Sloan School of Management. He joined Chicago Booth in 1991. His early scholarship explored the role of financial markets in economic development, culminating in the influential 2003 book Saving Capitalism from the Capitalists, coauthored with Luigi Zingales, Robert C. McCormack Distinguished Service Professor of Entrepreneurship and Finance at Chicago Booth. They argue that the essence of capitalism is competition; when preserved by effective institutions and consensual politics, it can expand economic opportunity enormously. That same year, Rajan received the inaugural Fischer Black Prize, awarded to the world’s leading finance researcher under age 40.
Rajan’s research soon shifted to sources of financial instability. In 2005 he warned that incentives within the financial system were encouraging excessive risk-taking, making economies increasingly vulnerable to crisis. His concerns, initially dismissed by many economists, gained widespread attention after the 2008 global financial crisis. In Fault Lines: How Hidden Fractures Still Threaten the World Economy, winner of the 2010 Financial Times and Goldman Sachs Business Book of the Year Award, Rajan argued that financial crises emerge not simply from market failures, but from the interaction of incentives in financial institutions, monetary policy, and broader social pressures—including inequality, technological change, and political dysfunction.
Rajan has paired his academic research with public service, serving as chief economist of the International Monetary Fund from 2003 to 2006, chief economic adviser to India’s Ministry of Finance from 2012 to 2013, and governor of the Reserve Bank of India from 2013 to 2016. These experiences reinforced his interest in how institutions navigate competing economic and political demands.
Today, Rajan’s research spans two complementary areas: the unintended consequences of central bank policy and the evolving purpose of the modern corporation. In both, he challenges long-standing assumptions by examining how institutions actually make decisions and respond to incentives. His work seeks to build a deeper understanding of the forces that shape economic outcomes, laying the intellectual foundations for policies and institutions that are more resilient, adaptable, and effective.