Raghuram Rajan accurately warned central bankers in 2005 of a potential financial crisis if banks lost confidence in each other. Now the International Monetary Fund’s former chief economist says the Federal Reserve should consider raising rates, even as almost 10 percent of the U.S. workforce remains unemployed.
“Cascading default, bank runs and catastrophic risk” lie ahead for the world economy unless Europe resolves its festering debt crisis, Timothy F. Geithner told global finance chiefs on the morning of Sept. 24.
The saying of radical things is easy sport among central-bank watchers. If they’re wrong, the wave of consensus erases most evidence they ever said anything at all. If, however, a wild, contrary call proves right, the rewards can be spectacular.