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Esteemed Professors: Chicago Booth Moments (Essay)

Chicago Booth ProfessorsIf you want specific examples of what makes Booth faculty different from other school faculties, who are mostly academicians with limited tenure in high profile roles, cite the examples of Raghuram Rajan, Luigi Zingales, Richard Thaler and Nicholas Epley.

Raghuram Rajan
Rajan, a rock star professor from Booth, rose to fame by predicting the 2008 Financial meltdown with the paper
“Has Financial Development Made the World Riskier? “ in 2005.

At that time, the popular belief was that the Economy was going through a boom. According to Rajan’s paper, it is easy to grow the company in the short-term with higher risk, but incentivizing professionals to attain growth at any cost will lead to long-term losses. A better approach that Raghuram suggested was to set up risk-adjusted growth targets. The paper describes how short-term profit targets incentivize investment bankers to herd together with the competition and employ similar strategies. What it does is that the difference in investment returns would be in the 5-10% range across all products. Rajan argues that such behavior takes the focus away from investing based on fundamentals to investing based on herd mentality.

The worst consequence - the fund managers might be fired if losses are accrued in the long-term, but finding another opportunity for them is easy as long as they can argue that the competitors also gave similar results. In the landmark paper in 2005, Rajan reiterates that group thinking and proclivity towards cyclical boom and bust in the financial system would eventually lead to a recession that would wipe out the savings of the most prudent savers and pensioners. The prediction became true. He suggested that Central banks should remain cautious and manage the liquidity in the system.

One of his suggestions was to monitor the large banks that had the maximum impact on the Financial sector, even hedge funds, that might not have a direct impact on the economy. Traditional funds often mirror the strategies used by the sophisticated investor and lose money in the process. He also proposed penalties for excessive risk. The central bankers interpreted the suggestion as ‘more regulation’ and ignored Rajan’s advice. 

Raghuram Rajan became the 23rd Governor of the Reserve Bank of India on Sep 2013 and is on leave from the University where he served as the Distinguished Service Professor of Finance. Rajan, who is associated with Booth since 1991, is not seeking a second term as the RBI governor in 2016. He will return to Booth with a new perspective on navigating the complexities of the Indian bureaucratic system.

Download F1GMAT's Chicago Booth MBA Essay Guide to learn about three more professors in the prompt: Luigi Zingales, Richard Thaler, and Nicholas Epley.


Also Included in the Essay Guide

Download 2017-18 Chicago Booth MBA Essay Guide

Booth MBA Essay Guide

1. Demonstrates how to turn your story into an interesting narrative .
 
2. Offers Context and explains the 6 Chicago Booth Moments: Modern Art, Teamwork and Individual Ambition, Adventure, Diversity, Classroom Experience and Harper Centre. 

3. Summarizes the Student Groups and how it can add value to your post-MBA journey.

4. 150+ Pages of Essay Writing and Editing Tips

Download 2017-18 Chicago Booth MBA Essay Guide

Top 31 MBA Programs + Analysis of 24 Industries (United States)


We analyze the MBA Curriculum, Class Profile, Total Cost and Post-MBA Salary of Top 31 MBA programs in the US.

+ Industry Trends

+ Future of Aerospace, Agriculture, Artificial Intelligence (AI), Automobile, Clean Tech, Education, Energy, Fashion, Financial Services, Insurance, FinTech, Government, Healthcare, Life Sciences, Military, Manufacturing, Maritime, Media/Advertising, Technology, Tourism, Trade, Transportation and Logistics, Virtual Reality (VR), and Augmented Reality (AR).


Pages: 327

Reviews

"I have not reviewed many books for MBA Admission consulting companies but doing it now to give all applicants a brief idea on what the book covers. The book includes 31 top MBA programs - almost all the top schools you have heard or considering for your MBA application. Each chapter is categorized by US States where there is at least one top MBA program. So you have California and Massachusetts with the most number of MBA programs and several states with one top program (Washington, Minnesota, Washington D.C., Connecticut, Virginia, and Maryland) and other states with two to three MBA programs. The book focuses on four aspects of an MBA program - curriculum, cost, class profile and post-MBA salary. For me, the breakdown of the cost and post-MBA industry was useful to make my decision on selecting the top 5 programs for 2017-18. It is a fascinating read in an industry where consultants overprice for their expertise. I recently bought a 30-page guide for $49. Compared to the obvious observation in that book, the 300+ page, MBA in US - the Ultimate guide is a goldmine of information and analysis." - Verified Purchase (21st June 2017)

"I bought the ultimate guide after a friend recommended it for me. The guide covers a lot of ground on the history of each prominent US states and goes into the reasons why a certain industry emerged from each state. In addition to the analysis of the economy, trends and expected changes in the next 5 years, the book features top MBA programs in each state with an extensive study of its curriculum. Ultimate guide is an essential reference book for MBA Applicants if they want to shortlist MBA programs based on value and cost, and not just ranking. " - Verified Purchase (14th June 2017)

"Should be a required reading before applying for an MBA. School events and MBA Tours are PR events disguised as a Q&A. On the contrary, the book is an unbiased analysis of each Top MBA program in the US supported by a large dataset and historical context on each industry. The guide builds a case for indstries that are likely to emerge as favourite for MBA graduates. Thorough and a valuable book." - Verified Purchase (15th June 2017)

"What I liked: The breadth of the information. Some of my favorite nonfiction books have taken the same approach as the ultimate guide have - cover background information in-depth. In the book, the author uses parallel threads to demonstrate the history of the state and the rise of industries. Will make you think how schools thrive based on the policy set by the state. California's obsession with Technology has revolutionized how we do Business and changed post-MBA trends. Many MBA applicants will be consulting or doing marketing for a Technology company. That is one key finding from the book. The latest development in AI, FinTech, and Automation is an additional context that I found valuable in the book.

Very informative. I would recommend that you read the book at least once in chronological order before using Table of Contents." - Verified Purchase (2nd July 2017)

Download How to Choose the Best MBA in US: The Ultimate Guide
(2018 Entering Class)

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