Koichi Hamada is Tuntex Professor Emeritus of Economics at Yale University, where
he specializes in the Japanese economy and international economics, and
Professor Emeritus at the University of Tokyo, where he taught before coming
to Yale in 1986. Professor Hamada has an L.L.B. and an M.A. in Economics from the University
of Tokyo as well as an M.A. and Ph.D. in Economics from Yale University.
His work on policy coordination, one of the first to apply game theory
to international finance, was published as The Political Economy of International
Monetary Interdependence (MIT Press, 1985), and some of his economic articles
are collected in Strategic Approaches to the International Economy: Selected
Essays of Koichi Hamada (Edward & Elgar, 1996). He is a fellow of the
Econometric Society and served as its council member from 1980 to 1985.
Hamada was the President of the Japanese Association of Economics and Econometrics
(now the Japan Economic Association) from 1994 to 1995 and was the founding
President of the Japan Law and Economics Association in 2003 (now its honorary
fellow). He was awarded the imperial decoration, the Order of the Sacred
Treasure, Gold and Silver Star, which is given to those who have accumulated
distinguished achievements for Japan, 2006.
In Japan, he has participated in many policy committees at the Ministry of
Finance, MITI, the Economic Planning Agency and other ministries.
From January 2001 to July 2002, Professor Hamada was on leave from Yale
University to serve as the first President of the Economic and Social Research
Institute (ESRI, Keizai shakai sogo kenkyujocho), Cabinet Office of the
Japanese Government. The ESRI engages in policy-oriented research and compiling
the GDP statistics. Hamada was appointed appointed special adviser to the Prime Minister of Japan in 2013.
The world economy is in the midst of financial turmoil. Using macroeconomic policies, governments are trying to counter these unprecedented disturbances. In different countries these policy measures take different forms. For example, the Federal Reserve Bank instituted an extremely expansionary monetary policy after the onset of the crisis. The Bank of Japan, however, continued a rather austere monetary policy. The yen exchange rate soared and Japanese industries had to cope with the hurdles of export as well as import competition. People the world over have been affected by these policy measures. How are these important macroeconomic policies determined? Are they determined by unbiased economic logic? Are they determined by lobbying pressures from various interest groups in the country? Are they possibly determined by institutional resistance to a change in the status quo? Or, could they be influenced by ignorance and misconception about basic common knowledge in economics? I ask these questions in comparing policy reactions in Japan and in the United States to the world economic crisis. This project is more than the comparison of economic mechanisms between the two countries; it is an interdisciplinary study of decision making and its incentive structure from a political as well as an economic perspective. I will ask how and why a certain policy decision was made rather than discuss what policy should have been adopted. This proposal is motivated by my personal experience as President of Japan's Economic and Social Research Institute during 2001-2003, at the end of Japan’s “lost decade.” How difficult it was for me to persuade State Ministers, high bureaucrats, politicians, news media and even some scholars to accept the appropriate economic logic! I will use an oral history method approach to gather data for comparison. I will interview well-informed and well-educated policy makers in both countries in order to find out how policy decisions were actually made. Iokibe and Ito offered a valuable example of this approach with their interview of Prime Minister Kiichi Miyazawa. I will ask if what policy makers thought was the right economic mechanism actually was the right macroeconomic policy, and what considerations affected their decisions. I will also ask what benefits and costs were most important in their policy decisions and what intellectual influences were most effective. The dividends from this research will be great. If political or lobbying influences distort the policy, then we must improve the incentive structures in policy making. If lack of proper knowledge is the barrier, then economists must enlighten the public by writing the correct and relevant text books and disseminating the appropriate knowledge of policy transmissions.