Policymaker and Professor

Today's Japan Times has an interesting article about one female policymaker and economist of BOJ.

(Friday, June 9, 2006)
Miyako Suda doesn't think of her job on the Bank of Japan's Policy Board as only talking to economists and crunching numbers. ...Suda, 58, was first appointed to the nine-member board, which steers the country's monetary policies, in April 2001.
Not only is she just the second woman to sit on the board, with her reappointment last April, she effectively became the first person to get a second five-year term under the revised Bank of Japan Law, which took effect in April 1998.

I first met her when attending her lecture on the current BOJ monetary policy, which was held by the Department of Economics, Osaka University in January 2005. I remember that I asked her the one question- do you keep in mind the effects on the rest of the world when making monetary policy?

She said no. She and the other policy board members usually don't think of the influences on the other foreign economies such as the U.S. economy when planning and implementing monetary policy.

She said that she is considering only the Japanese economy when conducting monetary policy though she at first had wondered why BOJ doesn't think of the economic influences on the other countries when it makes monetary policy.

The former professor of international economics and economic theory at Gakushuin University believes her job includes making the public aware of the importance of stabilizing monetary value and consumer prices. She has given more than 20 talks to mostly young people on finance and the economy.

Knowing about money "will help people when thinking about how to lead their lives," Suda said in a recent interview with The Japan Times. "I used to think financial education was about educating the public about risks and returns when making an investment," but it is more about learning how to use your money in daily life, she said.

I agree with what she says. When I come to dislike studying economics, I always try to think that I can clear my understanding on the actual economic activities by studying the economic theories and I can find what we should do as a policymaker in front of the economic problems by applying the economic models.

...She said that learning about American financial education -- characterized by former Federal Reserve Board Chairman Alan Greenspan's words, "No matter who you are, making informed decisions about what to do with your money will help build a more stable financial future for you and your family" -- was an eye-opener.

The more people learn about money, the easier they can make financial plans-for example to buy stocks, bonds, mutual funds, insurances and so on. There have been the discussions about whether a financial education should be encouraged in the primary and junior high school. Some critics say it is somewhat immoral to teach pupils and students at school how to buy stocks and bonds with the internet and to earn money without sweat and tears.

I don't know very well whether a finacial education should be done. However it is favorable for the young to study how the economy and the financial market works and to experience the imaginary management of small business.

..."Since the economy continuously changes and is growing more complex, analyzing the current state of the economy while using economic theories as a measure helps make consistent decisions," Suda said.

I think that a policymaker should know and use economic theories when planning economic policies. Don't you want to see a doctor who doesn't know medicine well, do you? No economic commentator but economic expert should plan and do economic policies.