A BOOK IS ALMOST ALWAYS a collective effort, even if it has only a single author. I owe many of the ideas in this book to the stimulating environment at the University of Chicago's Booth School of Business, where I have spent the best part of my academic life. The work I have coauthored with Douglas Diamond and Luigi Zingales is also central to some of my thinking here. Comments from Anil Kashyap, Richard Posner, Amit Seru, and Amir Sufi were very useful. I owe special thanks to Viral Acharya at New York University's Stern School of Business, who gave me very detailed comments on the chapters on finance. I have also benefited greatly from conversations with Marshall Bouton, John Cochrane, Arminio Fraga, Shrinivas Govindarajan, David Johnson, Randall Kroszner, Charles Prince, Edward Snyder, Joyce van Grondelle, Robert Vishny, Martin Wolf, and Naomi Woods. I thank Rishabh Sinha and Swapnil Sinha for their research assistance.
The time I spent at the International Monetary Fund between August 2003 and December 2006 taught me a lot about the politics of international finance. I learned a great deal from Anne Krueger and Rodrigo de Rato, as well as from my colleagues in the research department there, especially Timothy Callen, Charles Collyns, Kalpana Kochhar, Paolo Mauro, Gian Maria Milesi-Ferretti, Jonathan Ostry, Eswar Prasad, David Robinson, and Arvind Subramanian. Ken Rogoff, my predecessor at the Fund, has always been generous with his time and has been a source of very useful advice.
Seth Ditchik, my editor at Princeton University Press, has been invaluable in shaping my ideas into a coherent book. Peter Dougherty, the director, has been very supportive throughout the process. I also thank the other staff members of Princeton University Press and members of Princeton Editorial Associates who have helped bring the book to publication.
This book would not have been written without the support, encouragement, advice, and detailed comments I received from my wife, Radhika. She has been a true partner every step of the way. Finally, I thank my children, Tara and Akhil, for putting up with my workâmaybe it was a relief to them because it prevented me from giving their lives my undivided attention. At any rate, they give me two great reasons to try to make the world better for the generations to come.
Chicago, February 2010