The line between theory and practice is thick, but for noted Chicago-trained economist Raghuram Rajan, his jump from academic to policymaker is both inspiring and challenging:
Mr. Rajan had written during his doctoral work at the Massachusetts Institute of Technology about the merits of the Glass-Steagall Act separation of investment banking from other financial and commercial services. But after compiling voluminous data from the early 1930s together, Mr. Rajan and Mr. Kroszner concluded that the need for Glass-Steagall was much less clear-cut.
“He was willing to move from grand theory and get down and dirty on the details of institutions,” Mr. Kroszner said. “That back and forth between cerebral theory and practice is quite unusual.”
Like a longtime military academy strategist suddenly given an army to lead, Mr. Rajan, 50, a prominent University of Chicago business school economist, now finds himself running the Reserve Bank of India, one of the most important central banks in the developing world.
An earlier story in WSJ India highlights the five pillars that guide his policy approach in India. And if you are still intrigued, consider his book, Fault Lines that explores what happens when individual interests collide in a networked economic society.