Summary of This Economist Predicted the Last Crisis. What’s the Next One?

This Economist Predicted the Last Crisis. What’s the Next One? summary

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Some three years before the 2008 crisis hit, economist Raghuram Rajan cautioned the world about cracks in the financial system that few others were seeing. In this revealing interview on the Freakonomics Radio podcast, the University of Chicago professor and former chief economist for the International Monetary Fund sounds a warning call about new risks, including the rise of populism and a growing distrust of government and the leaders who guide democracies. His ideas for dealing with those threats present readers some important food for thought

About the Podcast

Freakonomics Radio, an award-winning podcast exploring "the hidden side of everything." Host Stephen J. Dubner is co-author of the Freakonomics books. His guest Raghuram Rajan is the author of The Third Pillar and an economist and professor at the University of Chicago.


As one of the few economists who warned in 2005 of the potential for a financial system meltdown, Raghuram Rajan has concerns that are worth hearing. Rajan sees economic red flags on the horizon for the world. But the reasons for his cautionary outlook are different this time. In 2005, Rajan’s apprehension was about financial engineering and problematic incentives in banking, both of which sparked the 2008 financial crisis. In his 2010 book Fault Lines, he pointed to other contributing factors, such as widening income inequality, frayed social safety nets, rampant...

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