When University of Chicago Booth School of Business Prof. Raghuram G. Rajan took charge as governor of the Reserve Bank of India in September 2013, the rupee was in free fall, inflation was high, India had a large current account deficit and India’s exchange reserves were falling.
As measure after measure failed to stabilize markets, speculators sensed a full-blown crisis and labelled India one of the Fragile Five economies.
Rajan’s response was to go all out, not just to tackle the crisis of confidence, but also to send a strong message about the strength of India’s institutions and the country’s ongoing program of reform. He outlined a vision that went beyond the immediate crisis to focus on long-term growth and stability, thus restoring investor confidence.
In his new book, I Do What I Do: On Reform, Rhetoric & Resolve (HarperCollins India), Rajan compiles speeches and commentary that convey what it was like to be at the helm of the central bank in those turbulent but exciting times. Rajan explains economic concepts in a readily accessible way while also addressing key issues that are not in any banking manual but essential to growth: the need for tolerance and respect, for instance, and the connection between political freedom and prosperity.
The unusual title of the book stems from a news conference Rajan gave in India at which a reporter asked him if he was a dove, like U.S. Federal Reserve Chair Janet Yellen, or a Hawk like former U.S. Federal Reserve Chair Paul Volcker. Frustrated with being pigeonholed, Rajan said, “I Do What I Do,” then stopped short, concerned of saying anything further could make headlines and move markets. The phrase made headlines the next day anyway.
“The book is an attempt to give people a sense of what it was like being at the RBI,” said Rajan. “It’s not about private conversations, but about the speeches that I gave when I was there. It is in a sense a glimpse of policymaking—both the rationale as well as the unfinished business that needs to be carried on.”
Rajan is the Eric J. Gleacher Distinguished Service Professor of Finance at Chicago Booth and former chief economist at the International Monetary Fund. He is the author of Fault Lines: How Hidden Fractures Still Threaten the World Economy, for which he was awarded the Financial Times-Goldman Sachs prize for best business book in 2010. Rajan was one of the few economists who warned of the 2008 global financial crisis before it hit.