Masaya Sakuragawa - Faculty Interview

The theme of this book is bubbles. The Lehman crisis in the United States was the catalyst that prompted me to start writing. In the world of mainstream economics, bubbles have been treated as strange events, as if they occurred by some mistake. However, the fact that a bubble and its collapse occurred in the United States, which has the most advanced financial system, convinced me that bubbles must be a universal phenomenon. Therefore, the motivation for this book was my desire to consider an economic theory centered on bubbles.

The content can be summed up by the idea that bubbles are "connected." Bubbles move from one country or region to another. Since the 1990s, the center of gravity for asset bubbles has shifted from Japan to East Asia, and then to the United States. And now it is moving further to China. Interestingly, the center of gravity of bubbles also shifts with the change in the main players of the economy at the time.

So, what happens to a region after a bubble collapses? In fact, bubbles remain connected within that region. After its bubble collapsed, the Japanese government repeatedly implemented expansionary fiscal and monetary policies aiming for economic recovery. While it may seem that these policies stimulated the economy by creating demand, in the long run, all they did was fill the void left by the crash of the asset bubble with other bubble assets, namely cash and government bonds. Ironically, this created another form of bubble. Can the government bond bubble continue to exist without meeting the fate of collapse?

In the classroom, my goal is to stimulate the "creative brain" within students. My educational policy is "Don't memorize, think." Unfortunately, in the world of university entrance exams, the opposite—"Memorize, don't think"—has become the correct approach. This is because it leads to higher scores on tests. What is required in student life is a rehabilitation of the brain—that is, to retrain a brain that has been conditioned to accept memorizing conclusions first, into one that can think carefully and deliberately over time. In the long journey of life, the ability to think logically and sequentially is a lifelong treasure. If you can acquire a flexible mind that enjoys the flow of logic, your life will be a fruitful one.