Professor Keiichiro Kobayashi
Specialty: Macroeconomics, Finance(Interviewer: 菊井, 古郡)『The seminar's field is finance, and the teacher's research field is......!?』
Please tell us about your research specialty
My main research interests are theoretical macroeconomics. I am engaged in four major areas ofresearch. The first is a study to create a model that includes financial constraints for DSGE-typemodels. Second, I am conducting research on models of banking crises. Third, I am studying
monetary theory, which has been popular since around 2005. The fourth and final research
project, which has not yet reached the level of academic research, is a study of fiscal models.
『I want to do something about the post-bubble recession. 』
When did you become interested in economics, Mr. Kobayashi?
I was not interested in economics from the beginning. I wanted to work for the benefit of society
at large, so after completing graduate school in the Department of Mathematical Engineering, I
joined the Ministry of International Trade and Industry (now the Ministry of Economy, Tradeand Industry) and worked in public administration for seven or eight years. At that time, it was
just after the bursting of the bubble economy, and I was involved in economic stimulus
measures. As I gained more experience in economic policy, I became seriously interested ineconomics, wondering how Japan could get out of the post-bubble recession. After studying
abroad, I joined the Research Institute of Economy, Trade and Industry (RIETI), where I
conducted research for 10 years. I have been thinking about what kind of theory would be usefulfor actual policy making.
『Finding the Problem 』
Tell us about your educational philosophy!
I want students to have a broad perspective, not just a corner view. To be more specific, I want
you to do your research with an eye to its connection to real-world policy. We want you to beinterested in public policy, and be highly motivated and proactive in finding problems. It is notan easy task, but if you can successfully formulate a problem, you can say that your research is
90% complete. It is more important to find a problem than to solve it.
『Balancing Textbooks and the Field. 』
How can I get closer to reality?
Including myself, I think we need to create opportunities to get in touch with people who are inreal financial institutions or who work for policy authorities. Students do not have many
opportunities to interact with working people, so if they study only textbooks, they will not beable to get a sense of reality. I think the only way to make up for this gap is, simply put, to go out
and do interviews. This is something we haven't been able to do much of in the seminar., but it isactually better to consciously have opportunities to listen to the Bank of Japan, government
economic agencies, and people in the private sector. I would like to create such opportunities inthe seminar, and last year we had a visit from a person from a financial institution. I would liketo create such opportunities this year as well.

『Looking back on my own student days』
Tell us about your student days, Dr. Kobayashi!
I was originally a student in the Department of Mathematical Engineering in the Faculty ofEngineering. I think I spent more time studying than liberal arts students because I had to do
experiments (laughs). Especially in my 3rd and 4th years, I was mainly focused on studying. In
my first and second years, I was active in a club called ESS. I think it was a good thing that I wasable to interact with friends from other faculties in that club, because it influenced my choice ofcareer when I became an adult. Looking back now, I see that my goals and career path changed
from time to time. First I thought about becoming a physicist, then I thought about becoming a
researcher in the field of mathematical engineering, and then I thought about going out into theworld and joining a government agency. ...... If I had become an economist in a straight line atthe beginning, I think I would have been more efficient, but if you ask me if all the things I havedone have been in vain, well, maybe they were not (laughs). I believe that studying various fields
has broadened my way of thinking in a sense. I think it is good that I can think about things froma slightly different point of view from ordinary economists. I think it was a good experience forme. In that sense, I think everyone worries about various career paths when they are students, butI think it is good to worry seriously about it each time because it will be good to look back on itlater.
『Reflecting on my own employment』
What was the deciding factor in your decision to join the Ministry of Economy, Trade andIndustry?
I wanted to be involved in a wide range of government fields. I thought that METI was in chargeof Japanese industry and the economy as a whole, so it was relatively close to my first choice. Iwas also interested in the welfare and ministry, but the deciding factors in my decision to join
METI were the broad scope of its administrative responsibilities and the positive atmosphere ofthe people I met at the interviews. Depending on the company, it may be quiet or aggressive, andyou can naturally get a sense of the overall atmosphere of the company through the people you
meet during your job search. At that time, I felt that the overall atmosphere at METI was more
active than at other workplaces, and that I could do many interesting things. But then there was alot of bureaucracy bashing and so on, so I don't know how it is now. ......(laugh)

Did anyone else from the engineering department have an interest in the economy?
They are relatively common. Nowadays, among those who take the national civil service examand enter the economic office, every year one or two people with a science background take thecivil service exam and enter the office for economic positions and so on. Recently, there aremany people who have undergraduate degrees or master's degrees. Of course, there are many
people with science backgrounds who enter the civil service as technicians, but there werepeople in the administrative field, especially those with an interest in economics, in my time, andeven now there are more and more of them. I think probably more than a few people a year are
joining the government as a whole. In the Ministry of Economy, Trade and Industry, I think there
are one or two a year.
『Seminar is a place where you train to think on your own』
What are you looking for in a second-year student who wants to apply for the seminar?

I hope you study properly in Hiyoshi and don't leave any Hiyoshi subjects behind (laughs). Also,
as I said before, you have to discover problems by yourself. I want them to enter the seminarwith that kind of spirit. And if possible, I would like them to think about issues with an interestin public policy. Those who want to become economists are also welcome, or rather, it is more
worthwhile for me to teach them. Of course, the majority of students will find a job after twoyears, but if they do, they will not be able to do research in economics. I would like them to enter
the program thinking that it is a place where they can train to think for themselves. If you are aperson who may become an economist in the future, I think I can give you appropriate guidance
to a certain extent through textbooks and papers, so I would like you to join us if you areinterested in a theoretical field such as the one I am working on now.
『Both Research and Circular Readings. 』
What kind of activities do you do as a seminar?
When the third-year students enter the program, they are divided into groups of about fiveaccording to their interests, and three to five students are asked to study with the goal of writing
their own papers for the Mita Festival and the end of the school year. As part of this process, thisyear we are doing a circular reading of an English textbook called "Modeling Monetary
Economies. In other words, I do both spontaneous research and reading in rotation. I also
sometimes have someone from outside come in as an extracurricular activity, or when I
participate in some symposium outside the university, I have them attend as an audience.
Grading is based on the presentations on the circular readings and papers.
『On writing our own papers.... 』
Do you have any tips for setting up a qualified problem?
Hmmm, it would be best if there was such a methodology, but unfortunately there isn't. We haveto do it by trial and error. I think it would be good to have them proactively express theiropinions about what they think is the problem. It is not easy for current seminar students to doso, but I would like them to discover problems by themselves and tell me that they think this is aproblem. In most cases, it is not a very interesting problem, but I think that by accumulating theexperience of failure, they will be able to create the right kind of problem within themselves. If
you come up with a theme that you think is worth researching, I would like you to propose it at
the seminar. I will probably give them a lot of criticism, and other people may criticize them aswell. My impression from my two years at Keio is that Japanese students, or Keio students ingeneral, tend to avoid such discussions in which they engage in full-frontal criticism, and arerather reserved. I think it would be a good idea to have more discussions without being afraid of
being criticized or criticizing each other.
『Thinking back on my time as a student and my time as an adult』☆Finally, please give a message to the second-year students☆
Many people might say this, but you should read the classics. When you become an adult, youwill become older and older when you don’t read the books you planned on reading. When you
have time, such as in Hiyoshi, you should read Japanese literature, world literature, or even moredifficult books. If you read something that is considered a world classic, it will become yourintellectual foundation even after you become a member of society. This is something I havereflected on myself. When you are 18 to 20 years old, it is difficult to read things that adults say
you must read in the 2000-year history of humankind (laugh). But I think it would be good lateron if you try to read some of the books without saying so. When you go out into the world andwork for a company or government office and have to make decisions at work, it is good toknow how the famous and clever people of the past thought and made decisions.
It would give you some confidence. So, you should read literary works, or even something about
Caesar (laughs). I think that reading such things can be a source of confidence when you takeaction.
What are some of the classics that have helped you gain confidence in yourself?
I wonder what it is. When I was younger, I was a bit dismissive of classical books, so I didn't
read many of them. I learned about the history of Rome from the book "Res gestae populi
romani" and read Gibbon's "The History of the Decline and Fall of the Roman Empire" on myown. That was after I entered the workforce, but I really think you should read this book when
you are a student. I think everyone need to worry about what kind of decisions to make and how
to negotiate with others in a company or organization on the job. When I began to actuallyexperience what it was like for people to interact with each other and for history to move
forward, I became interested in things that I had not been interested in when I was a student.
This is what made me want to learn about history. I could only understand this kind of thing after
I had experienced it as a working adult. I might forget them quickly even if I read the classics
when I was a student (laughs). If so, it could be a waste of time, but if it interests you, you shouldread it.
Editorial Postscript:
I feel that Prof. Kobayashi has a very calm atmosphere and was very attentive. As mentioned in
the interview, he seems to expect his students to be proactive, so second-year students whoaspire to become economists or want to discuss economics with him should definitely consider
enrolling in the seminar. We would like to express our sincere gratitude to Prof. Kobayashi fortaking time out of his busy schedule to agree to this interview. Thank you very much.
Written by 古郡.