LeveragedBuyout
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Can there be a clearer sign that Japan desperately needs structural reform? Abe needs to stop talking, and start doing. Political capital exists to be spent, not saved.
Quitting Japan, Top Economist Blames Labor Rules - Real Time Economics - WSJ
ByJacob M. Schlesinger
Economist Takatoshi Ito
Bloomberg News
Takatoshi Ito, one of Japan’s best-known economists, will join the Columbia University faculty in January after 12 years as a professor and a dean at the University of Tokyo, the country’s most prestigious academic institution.
A leading critic of the Bank of Japan 's long-cautious approach to fighting deflation, Mr. Ito was last year seen as one of Mr. Abe’s possible choices to head the central bank. He was instead tapped to run a project shaking up the $1.2 trillion government-run pension fund, and another on overhauling capital markets. He became an informal spokesman and defender of Abenomics to foreign investors and analysts.
Mr. Ito remains a defender, despite rising skepticism from other private economists following a recent spate of weak data. An expected rebound from the April sales tax hike “has been slow, but I think we should see the recovery path in September and October,” he said in an interview this week. “We are clearly out of deflation… The direction is very encouraging.”
But he will soon do more of his cheerleading from New York, since Mr. Abe’s pledge to reform Japan’s hidebound labor markets hasn’t moved fast enough to make it worth his while to stay in Tokyo.
“In Japan there’s a forced retirement at age 65 at national universities,” said the economist, who turns 64 in October. Japanese scholars in his position who want to remain in academia can move to a private school, where they take a pay cut and usually get saddled with heavy teaching and administrative responsibilities, crimping research opportunities.
“I still want to do more research, I feel I’m still productive,” Mr. Ito said. “I’m glad to know they have valued that at Columbia.”
There’s some irony in a top expert on Japan’s economy becoming an example for those making the case for reforms. The country faces a labor shortage, with population shrinking and aging. Policy makers talk regularly about the need to inject new flexibility into a rule-bound, seniority-based system, where status, pay, and retirement tend to be driven by fixed formulas rather than merit.
That affects the country’s ability to better mobilize its senior workforce, especially as life expectancy grows, leaving the country with a wealth of untapped talent and experience.
“In Japan, every professor is equal… In the U.S., the salary, teaching load, administrative duties are based on what the professor is good at,” Mr. Ito said. Japan’s “egalitarian system, its age-based system, is taking off some of our growth potential.”
“It’s a loss for Tokyo University,” Masafumi Maeda, executive vice president for general affairs for the school, said in an interview. He acknowledged that personnel rules sometimes make it harder for Todai, as it’s known, to retain talent — though he added that Mr. Ito could have taken advantage of recent rule changes allowing for more flexibility, designed to accommodate people like him.
Mr. Maeda added that American-style rules have their own disadvantages. “In the U.S. they have problems with old professors. I’ve talked to university heads who say they are jealous of Todai’s retirement rule because it’s difficult for them to hire younger professors.”
Mr. Ito isn’t the only Abe economic advisor to have relocated to an American ivory tower. Koichi Hamada, who persuaded Mr. Abe to launch his overhaul of the Bank of Japan and monetary policy, left Tokyo University in 1986 for Yale.
Nor is Mr. Ito himself a stranger to American academia. He got his Ph.D. in 1979 from Harvard, where he was a classmate of Lawrence Summers, a future university president and Treasury secretary. Mr. Ito then taught for eight years at the University of Minnesota.
He returned to Japan in 1998 with a faculty position at Tokyo’s Hitotsubashi University, in part to ensure his three children could grow up learning Japanese. But even after rebasing to his home country, Mr. Ito continued to go back and forth across the Pacific, and between academia and policymaking, working at the International Monetary Fund in Washington, D.C in the mid-1990s, and doing a stint as a visiting professor at Columbia in 2009. In Japan, he worked for two years at the finance ministry as an aide to Haruhiko Kuroda, then vice minister for international affairs, now the Bank of Japan governor.
A prolific author on topics ranging from foreign exchange markets to monetary policy, Mr. Ito’s curriculum vitae of appointments and writings runs to 17 pages. He boasts of twice topping the list of Japanese scholars included in a global database ranking the influence of economists, based on frequency of publication, and frequency of citations, among other things.
“He’s in a tiny group of economists who have made contributions to scholarship and also made economic policy at the highest levels,” said Merit Janow, dean of Columbia’s School of International Public Affairs, where Mr. Ito will be based. He will also work with the school’s Center on Japanese Economy and Business, which was founded in 1986 as American fascination with Tokyo’s global financial clout was cresting — and remains one of the few American academic organizations dedicated to Japanese economic studies.
Despite the move, Mr. Ito says he doesn’t plan on cutting his ties to Japan. Since the more flexible American academic contracts cover just nine months of the year, he expects to come back to Japan each summer to remain “plugged into Japanese economic policy circles.”
Quitting Japan, Top Economist Blames Labor Rules - Real Time Economics - WSJ
- September 3, 2014, 8:06 PM ET
ByJacob M. Schlesinger
Economist Takatoshi Ito
Bloomberg News
Takatoshi Ito, one of Japan’s best-known economists, will join the Columbia University faculty in January after 12 years as a professor and a dean at the University of Tokyo, the country’s most prestigious academic institution.
A leading critic of the Bank of Japan 's long-cautious approach to fighting deflation, Mr. Ito was last year seen as one of Mr. Abe’s possible choices to head the central bank. He was instead tapped to run a project shaking up the $1.2 trillion government-run pension fund, and another on overhauling capital markets. He became an informal spokesman and defender of Abenomics to foreign investors and analysts.
Mr. Ito remains a defender, despite rising skepticism from other private economists following a recent spate of weak data. An expected rebound from the April sales tax hike “has been slow, but I think we should see the recovery path in September and October,” he said in an interview this week. “We are clearly out of deflation… The direction is very encouraging.”
But he will soon do more of his cheerleading from New York, since Mr. Abe’s pledge to reform Japan’s hidebound labor markets hasn’t moved fast enough to make it worth his while to stay in Tokyo.
“In Japan there’s a forced retirement at age 65 at national universities,” said the economist, who turns 64 in October. Japanese scholars in his position who want to remain in academia can move to a private school, where they take a pay cut and usually get saddled with heavy teaching and administrative responsibilities, crimping research opportunities.
“I still want to do more research, I feel I’m still productive,” Mr. Ito said. “I’m glad to know they have valued that at Columbia.”
There’s some irony in a top expert on Japan’s economy becoming an example for those making the case for reforms. The country faces a labor shortage, with population shrinking and aging. Policy makers talk regularly about the need to inject new flexibility into a rule-bound, seniority-based system, where status, pay, and retirement tend to be driven by fixed formulas rather than merit.
That affects the country’s ability to better mobilize its senior workforce, especially as life expectancy grows, leaving the country with a wealth of untapped talent and experience.
“In Japan, every professor is equal… In the U.S., the salary, teaching load, administrative duties are based on what the professor is good at,” Mr. Ito said. Japan’s “egalitarian system, its age-based system, is taking off some of our growth potential.”
“It’s a loss for Tokyo University,” Masafumi Maeda, executive vice president for general affairs for the school, said in an interview. He acknowledged that personnel rules sometimes make it harder for Todai, as it’s known, to retain talent — though he added that Mr. Ito could have taken advantage of recent rule changes allowing for more flexibility, designed to accommodate people like him.
Mr. Maeda added that American-style rules have their own disadvantages. “In the U.S. they have problems with old professors. I’ve talked to university heads who say they are jealous of Todai’s retirement rule because it’s difficult for them to hire younger professors.”
Mr. Ito isn’t the only Abe economic advisor to have relocated to an American ivory tower. Koichi Hamada, who persuaded Mr. Abe to launch his overhaul of the Bank of Japan and monetary policy, left Tokyo University in 1986 for Yale.
Nor is Mr. Ito himself a stranger to American academia. He got his Ph.D. in 1979 from Harvard, where he was a classmate of Lawrence Summers, a future university president and Treasury secretary. Mr. Ito then taught for eight years at the University of Minnesota.
He returned to Japan in 1998 with a faculty position at Tokyo’s Hitotsubashi University, in part to ensure his three children could grow up learning Japanese. But even after rebasing to his home country, Mr. Ito continued to go back and forth across the Pacific, and between academia and policymaking, working at the International Monetary Fund in Washington, D.C in the mid-1990s, and doing a stint as a visiting professor at Columbia in 2009. In Japan, he worked for two years at the finance ministry as an aide to Haruhiko Kuroda, then vice minister for international affairs, now the Bank of Japan governor.
A prolific author on topics ranging from foreign exchange markets to monetary policy, Mr. Ito’s curriculum vitae of appointments and writings runs to 17 pages. He boasts of twice topping the list of Japanese scholars included in a global database ranking the influence of economists, based on frequency of publication, and frequency of citations, among other things.
“He’s in a tiny group of economists who have made contributions to scholarship and also made economic policy at the highest levels,” said Merit Janow, dean of Columbia’s School of International Public Affairs, where Mr. Ito will be based. He will also work with the school’s Center on Japanese Economy and Business, which was founded in 1986 as American fascination with Tokyo’s global financial clout was cresting — and remains one of the few American academic organizations dedicated to Japanese economic studies.
Despite the move, Mr. Ito says he doesn’t plan on cutting his ties to Japan. Since the more flexible American academic contracts cover just nine months of the year, he expects to come back to Japan each summer to remain “plugged into Japanese economic policy circles.”
