is a Japanese

economist An economist is a professional and practitioner in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this field there are ...

and

critic A critic is a person who communicates an assessment and an opinion of various forms of creative works such as art, literature, music, cinema, theater, fashion, architecture, and food. Critics may also take as their subject social or govern ...

. He has studied the theory of

money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money ar ...

, macro dynamics,

evolutionary economics Evolutionary economics is part of mainstream economics as well as a heterodox school of economic thought that is inspired by evolutionary biology. Much like mainstream economics, it stresses complex interdependencies, competition, growth, str ...

, philosophy of

corporations A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and ...

, fiduciary law, and the history of

sociology Sociology is a social science that focuses on society, human social behavior, patterns of social relationships, social interaction, and aspects of culture associated with everyday life. It uses various methods of empirical investigation and ...

. His work includes the book, '' Disequilibrium Dynamics'' (Yale University Press, 1981), and many articles published in academic journals. He has also written books and articles in newspapers and magazines for the general public on a wide variety of subjects ranging from global capitalism, post-modernity, civil society, money and language to literature and movies. His keen observations and analysis of the works of

Shakespeare William Shakespeare ( 26 April 1564 – 23 April 1616) was an English playwright, poet and actor. He is widely regarded as the greatest writer in the English language and the world's pre-eminent dramatist. He is often called England's natio ...

Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political theorist, journalist, critic of political economy, and socialist revolutionary. His best-known titles are the 1848 ...

, J. S. G. Boggs, and

Ihara Saikaku was a Japanese poet and creator of the " floating world" genre of Japanese prose (''ukiyo-zōshi''). Born as Hirayama Tōgo (平山藤五), the son of a wealthy merchant in Osaka, he first studied haikai poetry under Matsunaga Teitoku and lat ...

have established him as one of the foremost essayists in Japan.

Biography

Education

Katsuhito Iwai entered the

University of Tokyo , abbreviated as or UTokyo, is a public research university located in Bunkyō, Tokyo, Japan. Established in 1877, the university was the first Imperial University and is currently a Top Type university of the Top Global University Project by ...

, Japan in 1965. After graduating in 1969, he went on to study economics at MIT in

Cambridge Cambridge ( ) is a university city and the county town in Cambridgeshire, England. It is located on the River Cam approximately north of London. As of the 2021 United Kingdom census, the population of Cambridge was 145,700. Cambridge beca ...

Massachusetts Massachusetts (Massachusett language, Massachusett: ''Muhsachuweesut assachusett writing systems, məhswatʃəwiːsət'' English: , ), officially the Commonwealth of Massachusetts, is the most populous U.S. state, state in the New England ...

where he received his Ph.D. in 1972.

Career

He was an assistant research economist at the

University of California The University of California (UC) is a public land-grant research university system in the U.S. state of California. The system is composed of the campuses at Berkeley, Davis, Irvine, Los Angeles, Merced, Riverside, San Diego, San Fran ...

at Berkeley from 1972 to 1973 and an assistant professor of economics at

Yale University Yale University is a Private university, private research university in New Haven, Connecticut. Established in 1701 as the Collegiate School, it is the List of Colonial Colleges, third-oldest institution of higher education in the United Sta ...

from 1973 to 1979. He served as a senior research associate at the

Cowles Foundation for Research in Economics The Cowles Foundation for Research in Economics is an economic research institute at Yale University. It was created as the Cowles Commission for Research in Economics at Colorado Springs in 1932 by businessman and economist Alfred Cowles. In 19 ...

from 1979 to 1981. Since then, he has been associate professor and then professor of economics at the

. He was also a visiting professor of economics at the

University of Pennsylvania The University of Pennsylvania (also known as Penn or UPenn) is a private research university in Philadelphia. It is the fourth-oldest institution of higher education in the United States and is ranked among the highest-regarded universit ...

, and a visiting associate professor of international affairs at the

Woodrow Wilson School The Princeton School of Public and International Affairs (formerly the Woodrow Wilson School of Public and International Affairs) is a professional public policy school at Princeton University. The school provides an array of comprehensive course ...

Princeton University Princeton University is a private research university in Princeton, New Jersey. Founded in 1746 in Elizabeth as the College of New Jersey, Princeton is the fourth-oldest institution of higher education in the United States and one of the n ...

from 1988 to 1989. He was a visiting fellow in Dipartimento di Economia Politica,

Università di Siena The University of Siena ( it, Università degli Studi di Siena, abbreviation: UNISI) in Siena, Tuscany, is one of the oldest and first publicly funded universities in Italy. Originally called ''Studium Senese'', the institution was founded in 1 ...

in 1997. He served as the dean of Graduate School of Economics and Faculty of Economics at the

from 2001 to 2003. He has been a member of Science Council of Japan from 2005. In 2009, the

University of Belgrade The University of Belgrade ( sr, / ) is a public university in Serbia. It is the oldest and largest modern university in Serbia. Founded in 1808 as the Belgrade Higher School in revolutionary Serbia, by 1838 it merged with the Kragujevac- ...

awarded him an honorary doctorate. He won the 1982 Grand Prix of

Nikkei Economics Book Award Nikkei can refer to: *, abbreviated , Nikkei, a large media corporation in Japan *, abbreviated , Nikkei, a major business newspaper published in Japan *, a Japanese stock market index, published by ''Nihon Keizai Shimbun'' *, often simply ''Nikkei ...

for his book, ''Disequilibrium Dynamics – A Theoretical Analysis of Inflation and Unemployment'', the 1993

Suntory Academic Award (commonly referred to as simply Suntory) is a Japanese multinational brewing and distilling company group. Established in 1899, it is one of the oldest companies in the distribution of alcoholic beverages in Japan, and makes Japanese whisky. It ...

for his book, ''On Money'', and the 2003

Kobayashi Hideo Award Kobayashi (written: lit. "small forest") is the 8th most common Japanese surname. A less common variant is . Notable people with the surname include: Art figures Film, television, theater and music *, Japanese actress and voice actress * ...

for his book, ''What Will Become of the Corporation?'' In 2007, he was awarded the Purple Ribbon Medal for academic distinction by the Government of Japan.

Contributions

Katsuhito Iwai is known to have integrated

Knut Wicksell Johan Gustaf Knut Wicksell (December 20, 1851 – May 3, 1926) was a leading Swedish economist of the Stockholm school. His economic contributions would influence both the Keynesian and Austrian schools of economic thought. He was married to ...

's theory of cumulative process and J. M. Keynes' theory of

effective demand In economics, effective demand (ED) in a market is the demand for a product or service which occurs when purchasers are constrained in a different market. It contrasts with notional demand, which is the demand that occurs when purchasers are not ...

. He has demonstrated that, if, in a monetary economy, prices and wages are flexible, a deviation from equilibrium inevitably produces firms' expectational errors and starts a dynamic process that drives prices and wages cumulatively away from equilibrium. He has then argued in opposition to the neoclassical view of the self-regulating nature of

laissez-faire ''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups. ...

market mechanism In economics, the market mechanism is a mechanism by which the use of money exchanged by buyers and sellers with an open and understood system of value and time trade-offs in a market tends to optimize distribution of goods and services in at ...

, that what stabilizes the monetary economy is the inflexibility of

money wages A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis. F ...

and that an equilibrium it gravitates to almost never achieves full-employment. He has proven that the

trade-off A trade-off (or tradeoff) is a situational decision that involves diminishing or losing one quality, quantity, or property of a set or design in return for gains in other aspects. In simple terms, a tradeoff is where one thing increases, and anot ...

between

unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the refer ...

and

inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...

never ceases to exist no matter how long the time span.See Katsuhito Iwai is often cited for his formulation of a

bootstrap theory Bootstrapping is a self-starting process that is supposed to proceed without external input. Bootstrapping, bootstrap, or bootstraps may also refer to: * Bootstrap (front-end framework), a free collection of tools for creating websites and web ...

. Everybody uses money as money, Iwai writes, because everybody else uses money as money. He has offered proof, in his search-theoretic model of decentralized exchanges, that, to sustain itself as an equilibrium, the

monetary system A monetary system is a system by which a government provides money in a country's economy. Modern monetary systems usually consist of the national treasury, the mint, the central banks and commercial banks. Commodity money system A commodity ...

requires no "real" conditions. Iwai is credited with constructing mathematical models of Schumpeterian

evolutionary processes Evolution is change in the heritable characteristics of biological populations over successive generations. These characteristics are the expressions of genes, which are passed on from parent to offspring during reproduction. Variation ...

that describe how large numbers of firms interact with one another, by competing to innovate, trying to imitate and struggling to grow. Over a long span of time, Iwai argues, what the economy approaches is not a neoclassical equilibrium of uniform technology, but at best a statistical equilibrium of technological disequilibria. Profits in excess of normal rate, therefore, never vanish from the economy. Iwai has also built a new theory of the

corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and ...

and of

corporate governance Corporate governance is defined, described or delineated in diverse ways, depending on the writer's purpose. Writers focused on a disciplinary interest or context (such as accounting, finance, law, or management) often adopt narrow definitions ...

. According to Iwai's famed characterization, business corporation is an entity consisting of two-tier ownership relations. The shareholders own the corporation as a legal thing, and the corporation as a

legal person In law, a legal person is any person or 'thing' (less ambiguously, any legal entity) that can do the things a human person is usually able to do in law – such as enter into contracts, sue and be sued, own property, and so on. The reason for ...

owns the corporate assets in turn. This person-thing duality of the corporation, Iwai states, is behind the age-old controversy over what the essence of corporate personality is. The person-thing duality of the corporation also causes what we observe among the contemporary advanced capitalist economies around the world in terms of their highly varied

corporate structure A typical corporate structure consists of various departments that contribute to the company's overall mission and goals. Common departments include Marketing, Finance, Operations management, Human Resource, and IT. These five divisions represen ...

s. In light of these theorizations, Iwai has revived the traditional principle of corporate governance where the managers'

fiduciary duties A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person. One party, for exa ...

toward the corporation serve as its very foundation. In recent years, Iwai has been known to be involved in his attempts at developing a non-contractual theory of fiduciary law.

Selected publications

Book

Journal articles

* * * * * *

References

External links

Katsuhito Iwai Webpage

{{DEFAULTSORT:Iwai, Katsuhito 1947 births Living people People from Tokyo 20th-century Japanese economists 21st-century Japanese economists Macroeconomists Keynesians University of Tokyo alumni MIT School of Humanities, Arts, and Social Sciences alumni Yale University faculty University of Tokyo faculty Princeton University faculty University of Pennsylvania faculty Musashino University faculty International Christian University faculty Recipients of the Medal with Purple Ribbon Members of the Japan Academy Japanese racehorse owners and breeders