Eight years ago, Raj Chetty ’00 graduated from the College summa cum laude, having completed his undergraduate degree in three years and produced a prize-winning thesis on business investment.

Now he will return to Cambridge this spring to become a professor of economics at the age of 29, making him one of the youngest to receive tenure in the department’s history.

Chetty’s appointment comes in the midst of an unprecedented fiscal crisis for the University. Faculty of Arts and Sciences Dean Michael D. Smith has told departments to continue with faculty searches only if the quality of the candidates is high.

Economics department Chair James H. Stock wrote in an e-mail that Chetty will fill the department’s “substantial” needs in the public finance field.

“We are looking forward to his taking a central role at Harvard in a field in which Harvard has traditionally shown intellectual leadership, from Richard Musgrave, the father of modern public finance, to Marty Feldstein to Larry Summers to David Cutler and now to Raj Chetty,” Stock wrote.

Chetty has spent the past five years teaching at the University of California, Berkeley and was offered tenure at Harvard last year, at the age of 28, the same age as department superstar Lawrence H. Summers. Chetty, however, did not accept the University’s offer until last week.

“The decision is official and we are delighted with it,” Stock wrote in an e-mail. “He is a superb young public finance economist who is already a leader in the field.”

Chetty said it took him a year to weigh different options before deciding that Harvard is the place to go for him and his wife, who will be conducting stem cell research as a post-doctoral fellow.

“I had thought about coming back to Harvard for some time, as one always has an attachment to the place where he went to school,” Chetty wrote in an e-mail, “In addition to its outstanding faculty, Harvard’s main attractions for me are its outstanding students and the central presence of Cambridge in the economics profession.”

John F. Coyle III ’00, Chetty’s college roommate, said that Chetty will bring more than just his economics expertise to the University.

“He is super smart. Really thoughtful, really kind, and really likable,” said Coyle, who is currently a lecturer at Harvard Law School. “He played basketball, and he’s extremely good at Mario Kart. But he works really hard, no question.”

After graduating from the College, Chetty spent another three years at Harvard getting his Ph.D. degree in economics under the supervision of Martin S. Feldstein ’61, a chief economic adviser to former President Ronald Reagan.

At Berkeley, Chetty focused his research on the design of tax and social insurance programs. Earlier this year, he was awarded the American Young Economist Award, which included a $100,000 research grant, by The American magazine.