Macroeconomic Dynamics

MD Interview

AN INTERVIEW WITH HIROFUMI UZAWA

Masahiro Okuno-Fujiwaraa1 and Karl Shella2 c1

a1 University of Tokyo

a2 Cornell University

Abstract

Hirofumi Uzawa is one of the giants of modern economic theory. Hiro is probably best known to the readers of Macroeconomic Dynamics (MD) for his seminal articles on two-sector economic growth. The two-sector technology is more general than the one-sector technology: it allows a production possibility frontier that is strictly concave to the origin as opposed to being necessarily flat. This generality allows richer and more complex dynamics. This makes it especially useful for the analysis of economic fluctuations. The two-sector model is perfect for dynamic international trade.

Hiro is also well known to macroeconomists for his seminal contribution to endogenous growth. In his article in the 1965 IER, productivity permanently increases as the result of permanent accumulation of human capital. Uzawa was thus a first mover in the new growth theory. The symbol H (for Human Capital, or for Hiro?) is today everywhere in models of economic dynamics.

On his own and through his many students and mentees, Hiro has been the major inspiration for the modern theory of optimal economic growth. He taught a generation of pure and applied economists how to apply Pontryagin's maximum principle in economic dynamics. It seems that Uzawa introduced—or at least pushed the use of—phase diagrams in economic dynamics. Where would we be without this essential tool?

Most readers of MD are likely to think first of Uzawa's contributions to macro, but Hiro is equally well known for his superb works on mathematical economics, general equilibrium, and demand theory. Hiro's mathematics is elegant and often very deep. Like the quality mathematician that he is, he does not apply technique for technique's sake.

Hiro has made fundamental contributions to nonlinear programming. For the convex (but not necessarily smooth) case, he employed Slater's condition to obtain Kuhn–Tucker multipliers that satisfy the saddlepoint property necessary for an optimum. For the smooth (but not necessarily convex) case, Arrow, Hurwicz, and Uzawa introduced the current version of the constraint qualification, which ensures that optimality implies the existence of Kuhn–Tucker multipliers satisfying the saddlepoint property.

Hiro's paper “Walras's Existence Theorem and Brouwer's Fixed Point Theorem” in the Economic Studies Quarterly (1962) is a hidden gem on general equilibrium. This paper can be seen as foreshadowing Sonnenschein's result on excess demand functions. Hiro clarified old, important questions about recovering preference maps from demand functions. Hiro was probably the first to convincingly show—in the context of tatonnement adjustment—the important distinction between local stability and global stability in economic dynamics.

We have given here only a glimpse into the very large body of beautiful, influential Uzawa papers. Hiro's splendid bibliography is given at the end of the interview. Some of the work that Hiro has pursued energetically has yet to be widely recognized. One thinks, for example, of the Penrose Effect, Hiro's modeling of the organizational costs incurred in adding capital or making other changes in the way a firm does business.

Hiro has had many successful students and mentees. Your MD interviewers are lucky to have been among those whom Hiro has influenced profoundly. A very incomplete list of the others would also include Dave Cass, Steve Goldman, Harl Ryder, Hajime Oniki, Bob Lucas, George Akerlof, Joe Stiglitz, Miguel Sidrauski, Morris Teubal, Assaf Razin, Guillermo Calvo, Bill Ethier, and Lenny Mirman.

Hiro is widely recognized and even revered in Japan. He was elected to the very selective Japan Academy in 1989 at a remarkably young age. He was named “A Person of Cultural Merit” in 1983 and elected to the Order of Culture in 1997. Hiro has received significant international recognition. He was President of the Econometric Society. He is a Fellow of the Econometric Society, Member of the American Academy of Arts and Sciences, Foreign Honorary Member of the American Economic Association, and Foreign Associate of the U.S. National Academy of Sciences.

This interview took place nearly 10 years ago. We apologize to the readers and to Professor Uzawa for the delay in getting the transcript to the editor. The interview was held at the Research Center on Global Warming of the Development Bank of Japan, at which Hiro plays an important role. Four of us—Uzawa, the two interviewers, and Yumiko Baba, who was then a post-doc in economics at the University of Tokyo, there to operate the tape recorder—were collected at the Meiji Gakuin University in central Tokyo and whisked away in a large black automobile to Hiro's home court at the Bank. Hiro is an imposing figure: tall and erect with a very long, pointed white beard. His eyes are very active. He strokes his beard in a soothing manner. It is not difficult to be in awe of him. The interview took an even more formal tack because there were two in the room with the nickname “Hiro.” It was hence efficient to use last names at times.

The interviewers had agreed to try to steer Uzawa toward a discussion of his well-known basic technical contributions and away from his less well-known and more political contributions. In the end, we failed to steer Hiro onto any course other than his own. This is mostly as it should be. In this interview, you will hear about some of the technical contributions for which Hiro is widely known. You will also hear about what motivated him to enter economics, his strong social concerns and strong political views, the turbulence of the war years and the postwar years, and his recent work and interests. A few of the paragraphs at the end of the interview were added to bring the record up to date. What comes through is a picture of Hirofumi Uzawa, a truly distinguished scholar and a person dedicated to human betterment.

Hiro talked in his usual warm, friendly voice. He peppered the interview with his strong opinions about other major economists, often with lively anecdotes. Of course, Hiro's opinions are his own, not those of the interviewers or the editors. We hope that the readers will get as much out of this conversation with Hiro as we did.

(Received June 29 1998)

(Revised March 2008)

Keywords:

  • Endogenous Growth Theory;
  • General Equilibrium;
  • Global Stability;
  • Nonlinear Programming;
  • Two-Sector Model

Correspondence:

c1 Address correspondence to: Karl Shell, Department of Economics, Cornell University, Ithaca, NY 14853-7601, USA; e-mail: ks22@cornell.edu.

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