Fault Lines: How Hidden Fractures Still Threaten The World Economy is written by a professor and a former IMF Chief Economist. This book not only examines the causes of the global financial crisis of 2008, it also suggests some practical measures to prevent such a thing from happening again. Summary Of The Book Just like geological fault lines, cracks in the financial landscape run deep and mostly unseen. Fault Lines: How Hidden Fractures Still Threaten The World Economy says that if these weaknesses are not fixed, it could result in further quakes in the financial world that could be as bad as what happened in 2008. The author of this book made himself unpopular by predicting a serious financial crisis at a Federal Reserve celebratory function in 2005. He was one of the minority who spotted the trouble that lay ahead, and in a short time, he was proved right. This book is one of the many that goes into the causes and effects of the current crisis. But, it doesn't limit itself to pointing fingers at the usual suspects. The author says that an analysis of this crisis should go beyond blaming greedy bankers and individual investors. He says that in a way, the action of all parties concerned was actually a logical response to the prevailing situation and the available options. He says that the trouble had been brewing for long, with the discrepancy in the earning power of the educated and the unqualified, in the anxiety over job security, and concerns about health insurance. He also points out that the government opted for some quick-fix measures like allowing banks to provide credit to people with doubtful ability to pay back the loans, and promises of bailouts that encouraged some to take disproportionate risks. Fault Lines: How Hidden Fractures Still Threaten The World Economy identifies and analyzes the problems created by short-sighted policies and greed. It then suggests some tough measures to ensure that such a crisis does not occur again. About Raghuram Rajan Raghuram Govinda Rajan is an economist, professor and writer. He is also the author of Saving Capitalism from the Capitalists and The True Lessons of the Recession: The West Can’t Borrow and Spend Its Way to Recovery. Raghuram Rajan was born in 1963 to a Tamil family in Bhopal. He graduated from IIT-Delhi with a degree in Electrical Engineering and then did his MBA at IIM-Ahmedabad. He earned his Doctorate in Management from MIT. In 2003, he became the youngest person to be appointed as the chief economist at IMF. He is the Professor of Finance at the University of Chicago’s graduate business school. Currently, he is on leave of absence from that post, as he has been appointed as the Governor of the Reserve Bank of India.
: How Hidden Fractures Still Threaten The World Economy is an enlightening book that aims to draw your attention to the fault lines that are present in the world's economy today. The author believes that these fault lines were responsible for the financial crisis that the world saw, in the year 2008. He also believes that the world could be in for some more severe financial situations, if the fault lines that are mentioned in this book are not attended to, immediately. The author mentions his belief that the financial meltdown experienced by the world has been due to these fault lines and not solely due to the choices made by individuals, such as government officials, bankers and homemakers. He believes that the decisions made by these people were made as a logical response to the fault lines in the world's economy. In this book, the author chalks out a fixed course of action that the world's economies must adopt, if they want to see things change for the better. He also chalks out a specific developmental plan for India as well. He stresses upon the fact that the country must act upon the advice that is given in this book, if change is to take place for the better, in the near future.
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