In INET's full interview with Raghuram Rajan, he discusses his book "Fault Lines: How Hidden Fractures Sill Threaten the World Economy;" as well as the intersection of government and the economy and China's upcoming challenges.
In part 5 of INET's interview with Raghuram Rajan he discusses the convertibility of the RMB, and how vested interests of China's state-owned enterprises prevent the economy from shifting towards domestic consumption.
In part 4 of INET's interview with Raghuram Rajan he criticizes the narrow focus of most economists: "Just like in medicine: you have to have experts in each area, but you also need general practitioners - to integrate. I think we devalued the general practitioner."
In part 3 of INET's interview, Raghuram Rajan says: "The left and the right have a common diagnosis of the problem: the government is captured by big business. Marx said 'Get rid of big buiness.' Stigler said 'Get rid of government.'" But in fact they need to work together, he says, and the task is to delineate the respective responsibilities. Read more
In part 2 of INET's interview, Raghuram Rajan acknowledges that "government is there to soften the rough edges of capitalism." But - despite good intentions - the government is prone to manipulation by private interests, he warns.
In part 1 of INET's interview with Raghuram Rajan he connects rising inequality and debt, government stimulus programs, and international capital mobility to explain the crisis and fragility in the world economy. Read more
In part 6 of INET's interview with Lance Taylor, he says that if the government starts thinking it's a household, then we're in a lot of trouble. Unlike families, governments can sustain investment from debt for the long term.
"...The financial collapse of 2007 and the recession that followed left many economists on the defensive. News programs, magazines, pundits, and even the Queen of England all asked some variant of the question, why didn't you see it coming?..."
Raghuram Rajan was one of the few economists who warned of the global financial crisis before it hit. Now, as the world struggles to recover, it's tempting to blame what happened on just a few greedy bankers who took irrational risks and left the rest of us to foot the bill. Read more