Former Bank of Japan Governor Visits Tuck

June 17, 2014 – guest post by Ken Yoshida T’15 --

Wouldn’t you be excited if you had a chance to talk with Ben Bernanke, former chairman of the United States Federal Reserve? That is how I, a Japanese person, felt when I heard that Masaaki Shirakawa, former governor of the Bank of Japan (BOJ), was visiting Tuck in early May.

Mr. Shirakawa started his speech at Tuck by explaining the events of the last 20 years in Japan. “People like to call this era the lost decades, but is it really lost? I don’t think so.” Mr. Shirakawa explained that after the burst of the bubble in the 1990s, the economy declined for a decade. However, that it took another decade to recover was due to demographics, and deflation was a consequence.

He stated that an expanding labor force and improving productivity were the keys to the Japanese economy’s recovery. He pointed out the importance of providing job opportunities for women and the elderly. With regard to improving productivity, he emphasized the importance of placing the right people in the right place, rather than simply expecting innovation to happen. He also observed that while quantitative easing works in an acute illness period, it’s less effective during a chronic illness period.

The question and answer session was a highlight of the event, and I appreciated Mr. Shirakawa’s candor. I would like to thank Professor Peter Fisher for organizing this wonderful event for us. Mr. Shirakawa also seemed to enjoy his stay in Hanover. “You guys are lucky that you can take Peter (Fisher)’s classes at Tuck. I really want to be in that class.” It is heartwarming to see a 30-year friendship such as theirs.

(The author is pictured below on far right talking with Mr. Shirakawa with fellow students and Prof. Fisher.)