Contents

January 2001

A publication of the Department of EconomicsFaculty of Arts & Social Sciences

Founded 1905

NATIONAL UNIVERSITY

of SINGAPORE

Wong Nang Jang*

Distinguished 1-2Alumnus Column

Department News 3-9

Focus 10-11

Publications 12-13

Conferences 14-15

Staff News 16

Student News 17-20

continued on next page

DistinguishedAlumnus Column

DistinguishedAlumnus Column

ECONOMICSNEWSLETTER

Banking Career in Singapore:Reflections on ChangingNeeds of the Industry

* Mr. Wong Nang Jang is the Chairman of Banking Computer Services Pte Ltd and its subsidiary,BCS Information Systems Pte Ltd. He is also the Chairman of OCBC Finance Ltd. Mr. Wongretired as the Deputy President of OCBC Bank in March 2000 but still remains on the Boardof Directors. He also sits on the Board of Directors of various other institutions such as SingaporeSymphonia Company Ltd, SIA Engineering Company Ltd, WBL Corporation Ltd, and GlobalInvestment Holdings in Taiwan. Mr. Wong also serves as a member of the Note AdvisoryCommittee of the Board of Commissioners of Currency, Singapore, the Advisory Committeeof the Lee Kuan Yew Distinguished Visitor Program, the Income Tax Board of Review and theGST Board of Review of the Inland Revenue Authority of Singapore. He is a Trustee of NTUCFairprice Co-operative and the Institute of Southeast Asian Studies.

Professor Chng, Head of the Department of Economics at NUS, haspaid me an undue honor by asking for an article in the DistinguishedAlumnus Column of the Economics Newsletter, perhaps because ofmy long years of service in the banking industry.

The simple fact of the matter is that when I graduated in 1962, bankingwas not a career competitively sought by those who had the highestpotential, and thus competition for jobs was not as fierce as it is today.Thus by sheer luck I was asked to present myself as a candidate foremployment at the antecedent of what is today Citibank, currently amuch sought after employer. Quite simply, the lack of competitionaccorded me the chance to work hard, learn on the job. Moreimportantly, my then employer gave me every opportunity to realizemy own potential. Of course, the reciprocal was that I had to earn mykeep and give of my best.

2

distinguished alumnus columncontinued from front page

Having retired at the ripe age of 60, it may beuseful to share some of my life’s experience. Ifthere is one major characteristic, it is the need tomeet the challenges of change. Change was aconstant in my life, whether in the pursuit ofeducation, of skills, or in putting to use theeducation and skills so acquired.

The past 60 years can be broadly divided intothree phases of 20 years each. The first phasewas to acquire education. In the next 20 years,acquisition of skills and knowledge was ofparamount importance. In the final phase, I wasfortunate to deploy what limited skills andknowledge in pursuit of banking in a domesticenvironment laced with internationalinvolvement.

During the first 20 years of my life, change inschool systems and curricula happened withoutfail. In primary school, I started in Primary 1 soonafter World War II had just ended, and schoolswere being reopened and in a constant state offlux. Curricula had to be reorganized, and boysof ages between 6 and 10 were thrown togetheras almost four years of occupation by foreigntroops meant that everybody in that age groupstarted together from scratch. In retrospect, thiswas perhaps the most carefree period of my life.

In secondary school, it was decided that ourcohort had to take the full certificate of the HigherSchool Certificate of Education introduced for thefirst time in Singapore, meaning that we had tosit for four “A” level subjects, while scrapping theUniversity Entrance Examinations. It was a miraclethat I survived and qualified to enter a university.

I enrolled as a matriculated student of theUniversity of Malaya in Singapore, and graduatedfrom the University of Singapore. Somewhere inthe bowels of the Faculty of Arts in the University,it was decided that with effect from my freshmanyear, qualifying to pursue an honors degree wouldbe based on the results of the first yearexaminations. Thereafter, such qualifiers will havetwo additional years of study to obtain an honorsdegree. Most significantly, there was to be ahoneymoon year in between, i.e. no exams atthe end of the second academic year. Again, Isurvived and graduated with an honors degree.

For the next 20 years, my social and recreationallife was a total blur. I knew more about bankingand finance than about music and sports. I spent

more time at my work than a combination ofhome/sleep/recreation. Words like “quality of life”was not in my vocabulary. Even on the day of myengagement to be married, I was delayed at theoffice and appeared at the engagement party fivehours later than the scheduled time. It was awonder that she (now my wife) was willing towait for me. (I was not late for my wedding)

In Singapore there was a sea change in the waywe organized our economic life. Banking as arepository of savings became an instrument ofeconomic development. Bankers were no moremerely custodians of funds but had to becomejudges of risk in new and hitherto unknownterritories, such as lending for manufacturing, orhedgers of foreign exchange risk, to name onlytwo of many.

Personally, it was perhaps the most rewarding andchallenging phase of my life. The fact was thatthose of us in banking then was really notsufficiently skilled or trained to cope with thesenew demands. We had to learn on the job, andin some cases, learn from experience acquiredoverseas. Some of us went to work overseas,others learned from specialists assigned to workin Singapore by multi-national banks.

The third and final 20 years of my life, and thesecond phase of my career, was spent in bringingthat experience to bear in a local bank. Havingacquired a modest modicum of skill, I was happyto share what little I had with colleagues whowere eager to learn, performed diligently in theirwork, and had that all-important quality requiredof bankers - integrity.

Those that possessed sagacity and integrity indefiance of get rich-quick schemes during theboom years have indeed survived the ravages ofsuccessive economic recessions. Fact is, they wereneither wealthy nor broke. It was in thisgeneration that a new breed of well-educatedand well-trained bankers was born. Some of themare still in prominent and responsible positions,some have switched to different businessendeavors, and the rest have gone into pasture.Significantly, they are not in want, andoccasionally can even bring out old medals (andscars) to show to each other.

That is probably the most rewarding thing and Isalute them and wish them well for the future,which will require even more change.

3

SIBA 25th Anniversary-NUS Lectureby Professor Robert Mundell

department news

The Department, in conjunction with theSingapore Investment Banking Association (SIBA),organized a lecture by Professor Robert Mundell,Professor of Economics at Columbia University inNew York, and the winner of 1999 Nobel Prize inEconomic Sciences on Thursday, 7 September2000, 5-6:30pm at Lecture Theatre 11. The topicof his lecture was “Currency Areas in theInternational Monetary System at the Turn of theCentury” and it was attended by students andfaculties of NUS, and invited guests from NTU,SMU, Ministries, Statutory Boards and Embassies.Assoc Prof Chng Meng Kng, Head of Department,chaired the lecture while the Department’s IreneNg played the role of MC for the event.

Professor Mundell started his lecture by outliningthe five key events that characterize the worldtoday: New economy, Globalization, Strength ofthe US economy, Corporate and Bankingrestructuring, and the advent of Euro. He brieflydescribed the evolution of US economy over thepast century and highlighted the emergence ofdollar as the strongest currency in theinternational monetary system since the end ofgold standard in 1971. He however cautionedthat the US economy might slow down in 2-3years leading to weaker dollar (vis-à-vis euro) thatmight have disastrous consequences for the worldin general and Asia in particular. About Corporateand banking restructuring, he mentioned aboutmajor mergers and takeovers and suggested thatthe “optimum size” is now much larger due toglobalization. He noted that while trend towardsglobalization has been accelerated by systematictariff reductions, free trade areas, enhancedcapital mobility, and information technology, theefficiency of the current system is greatly reducedby the uncertainty over exchange rates that resultin trillions of dollars of cross-border waste capitalmovements every year.

He elaborated on the advent of euro that currentlycovers 11 European countries (these countrieshave fixed exchange rates with euro) and by July2002, euro will completely replace the domesticcurrencies in these 11 countries. Size of euro areawill expand, Greece will join by the end of thisyear, Britain will eventually join (he believes),Sweden and Denmark will also join the groupand altogether the membership will rise to 15soon. By the end of the decade, the EU will

SIBA 25th Anniversary-NUS Lectureby Professor Robert Mundell

contain several more of the thirteen countries thathave been invited to apply for membership. Inaddition, 13 CFA franc countries in West andCentral Africa are also tied to this euro area. It isplausible that a few more countries in North Africaand the Middle East will also choose to fix theircurrencies to the euro and the euro area couldeasily contain as many as 50 countries with apopulation exceeding 500 million and a GDPsubstantially larger than the US in a decade. Healso stressed that the dollar area will also expandover the next 10 years. Some countries in LatinAmerica and elsewhere will be inclined to followthe path pioneered by Argentina in 1991.Theywill be using dollar as an anchor for theircurrencies, just as countries in Africa andelsewhere will be using euro as an anchor for theircurrencies. New currency areas may also emerge(for example, the proposed currency area inMercosur Free Trade Area).

Is it possible to have international monetaryreform along the lines pioneered by EMU of asingle currency for the world? Professor Mundelldoes not think so. Instead, he proposed a fixedexchange rate multiple-currency monetary unionfor two or three of the worlds’ “islands ofstability”(dollar, euro, and yen areas) and thendescribed how this union can be generalized forthe rest of the world. Given the convergence ofinflation rates, it is possible to lock exchange ratesand bring interest rates into line with one another.The mechanism for locking exchange rates couldbe simplified by assigning different tasks to thethree central banks. One of the three currenciescould be chosen as the ‘pivot’ currency and onthe basis of the largest monetary mass, it is best

Professor Mundell delivering the Lecture.

continued on page 4

4

department news

to choose US dollar as the pivot. And the othercountries could be assigned the task of fixing theexchange rates (yen to dollar and euro to dollar).The assignment for the Bank of Japan and ECBwould be to keep exchange rates fixed while thatfor the expanded Federal Reserve would be tostabilize prices. The Policy committee of Fedwould incorporate Japanese and European as wellas American experts. The expanded Fed wouldtake decisions about tightening or looseningcredit and there would be a common target formonetary policy. The price index wouldincorporate goods representative of all areas andthe next step would be to agree on a commontarget for inflation.

How can the exchange rate stability of threemajor currency areas be used to create a multiple-currency monetary union for the whole world?Professor Mundell proposed that IMF could beturned into a world central bank and granted theauthority to produce a world currency. The threelargest currency areas could be designated asagents of the Board of Governors of the IMF. Thenumeraire currency might be equated to a dollaror a euro or 100 yen. Each participating member

continued from page 3

in the union would fix its local currency to theworld currency (common numeraire), followingthe adjustment principles of a currency board anddenominate prices in the world currency as wellas local currency. The world currency itself wouldbe backed by the currencies of three largestcentral banks. There will be no currency crises(both internal and external stability would beattained) in participating countries as long as theyadhered to the rules for fixed exchange rates. Aworld currency would provide a universal unit ofaccount for transmitting values and be a sourceof substantial increase in the gains from trade.Language is a medium of communication andcurrency is a medium of exchange. National/ethnic languages are here to stay but a commonworld language (second language) wouldobviously facilitate international understanding.Similarly, national/regional currencies are likelyto stay for a long time but a common worldcurrency would be magnificent step towardsglobalization, he said.

The lecture was followed by a brief Q& A sessionthat ended at 6:30 pm. (Assoc Prof HabibullahKhan prepared this write-up)

To commemorate this year’s NUS Alumni Day,the Department organized a Tea-cum-RoundTable Discussion on 16 September 2000. TheProgram started with a tea reception from 2 to2.30pm, followed by an informal round tablediscussion on “Navigating Complexity:Challenges Facing Singapore in the NewEconomy” held in the Faculty Lounge at the ShawFoundation Building at 2:30 to 4:30pm.Thediscussion chaired by Assoc Prof Chng Meng Kng,Head of Department, was well attended.

In his welcoming address, Professor Chngreminded that this year’s Alumni Day has a specialsignificance as it coincided with the birthday ofSenior Minister Lee Kuan Yew, the architect ofmodern Singapore, and stressed that a strongsense of belonging in our graduates with almamater can be imbued through such informalmeetings. Four papers were then presented inthe following order: “Can Singapore Competein the Premier League?” (By Assoc Prof PeterWilson), “E-Commerce: Potential Gains andRisks”(By Dr Lu Ding), “Coping with

Globalization: How is it Affecting Jobs andWages?” (By Assoc Prof Hoon Hian Teck), and“Can Singapore be as Free-Wheeling as SiliconValley?” (By Assoc Prof Koh Ai Tee).

Professor Wilson pointed out that althoughSingapore can be classified in the “PremierLeague” of developed nations on conventional

NUS Alumni Day, 16 September, 2000NUS Alumni Day, 16 September, 2000

Alumni Day Round-Table Discussion panel and theparticipants. Panel members from the left are: Dr LuDing, Assoc Prof Peter Wilson, Assoc Prof ChngMeng Kng, Assoc Prof Hoon Hian Teck and AssocProf Koh Ai Tee

5

criteria such as sustained economic growth andliving standards, it is difficult to classify her in thedevelopment spectrum due to lack of naturalresources, decline in the service sector, heavyreliance on foreigners, re-export nature ofeconomy, and her city-state character. Dr Lu Dingin his brief presentation carefully examined theadvantages and disadvantages of E-commerceover the conventional business and made a criticalappraisal of government policies and legalreforms undertaken to promote Singapore as anE-commerce hub. Professor Hoon in hispresentation provided a detailed account of theevolution of wages and unemployment inSingapore over the past four decades andexamined the challenges that Singapore’s labormarker currently face due to globalization andtechnological breakthrough. Finally, Professor Kohin her presentation outlined the main features ofthe Silicon Valley Model and examined therelevance of the model to Singapore’s currentdrive towards higher value-added industries.

A stimulating Q&A session followed thepresentations. Professor Koh was asked howSingapore entrepreneurs could overcome thechallenge of lack of big domestic market (unliketheir Silicon Valley counterparts) to test theirproducts. In reply, Professor Koh mentioned thatwhile the task is difficult, it could be accomplishedwith creative and innovative ideas. “The localfirms must change their mindsets and go to USand Europe to market their products as they nowhave to compete globally”, she suggests.Professor Hoon was asked about the precise role

of foreign talent in Singapore. Citing the empiricalevidences from the literature, he pointed out thatthere is a strong positive relationship betweenhuman capital and economic growth (moreknowledgeable workers can adopt the newtechnology much faster). Augmenting the talentpool would therefore enable Singapore to raiseits growth via improving the rate of technologydiffusion from the OECD countries, he argued.

In relation to Professor Wilson’s question whetherSingapore can compete, Professor Chng notedthat while authors such as Michael Porter writeson The Competitive Advantage of Nations, withglobalization (and the declining importance ofnational boundaries) it is really firms rather thannations that compete (as Krugman has pointedout). In this regard, the more meaningful questionis whether Singapore firms or Singaporeans cancompete? Also, as internationalization leads todenationalization, particularly for such a highlyinternationalized global city like Singapore, arelated question increasingly is: what do youmean by Singaporean? Dr Lu Ding asked whetherProfessor Wilson should also not use wealth as ameasure of Singapore’s development. ProfessorWilson replied that wealth figures are not easilyobtainable. Professor Chng remarked that wealth,as a derived measure such as rent, is not ameaningful measure of development. He pointedout that the total value of land in Tokyo in thelate eighties was many times the land value ofthe whole of California. The meeting ended at5.00 pm. (Assoc Prof Habibullah Khan preparedthis write-up)

department news

EC4217 MARKETS AND GOVERNANCE

Recently, there has been a proliferation ofmarket forms beyond the traditional price-mediated market where buyers and sellerstrade homogenous commodities. At the sametime, there is an increasing recognition of theeconomic role of governance at differentorganizational levels. This course will study thegovernance of an organization, from thecorporation to the state, along with a rangeof market forms, including e-commerce andsmart markets, and explore their interrelation.It will also discuss results from the

experimental economics literature concerningthe performance of different market forms inlaboratory settings.

EC5274 CAPITAL MARKETS, ASSETPRICING AND PORTFOLIOMANAGEMENT

This course is designed to offer a broadoverview of financial assets traded in themoney, options and stock markets. Topicsinclude valuation of bonds and securities,analysis of options and futures contracts, assetpricing models and some applications.

New Modules for Semester II, 2000/2001New Modules for Semester II, 2000/2001

6

Meeting and Dialogue Sessionwith Young MITI Officials

ESU Press ConferenceThe Econometric Studies Unit held a press conferenceon 3 October 2000 to release its updated forecasts.There was wide media coverage for the conference,whose theme was “Could high oil prices derail Asianrecovery?”

At the conference, Mr Ng Weng Hoong, Editor ofEnergyAsia, brought attention to the increasing influenceof “paper chasers” or speculators in the oil market thatled to increased volatility in oil prices.

Assoc Prof Tilak Abeysinghe presented an extensive setof estimates that show how oil prices affect theeconomic growth of Singapore and 11 of her majortrading partners directly and indirectly. Within aboutfour quarters, Singapore remains less affected by oilprices because of the cushioning effect coming fromthe oil-exporting major trading partners, Malaysia andIndonesia. However, as time passes on, even Malaysiaand Indonesia cannot escape the negative effect of highoil prices because of the negative influence comingthrough their trading partners.

Assoc Prof Peter Wilson presented the updated growthforecasts for Singapore and the trading partners under

ESU Press Conference

the assumption that the average Brent crude oil pricewill drop from US$ 31 in 2000Q3 to US$ 25 in Q4 andUS$ 20 thereafter. The updated forecast for Singaporefor 2000 and 2001 were 9% and 6.5% respectively. Hepresented a detailed background discussion on theOECD economies and regional economies. He alsodiscussed the risk factors such as high oil prices and thepossibility of currency volatility if US stock market jitters.(Assoc Prof Tilak Abeysinghe prepared this write-up)

department news

Members from the Press listening to presentation byAssoc Prof Tilak Abeysinghe.

Meeting and Dialogue Sessionwith Young MITI Officials

F ive graduate students and nine honorsstudents from the Department attended ameeting and dialogue session with young officialsfrom the Ministry of International Trade andIndustry (MITI), Japan, on 17 October 2000.

The six second-year MITI officials were on a visitto Singapore for a training program in SoutheastAsian countries. Expected to be future MITIleaders, their goal was to understand challengesfacing Southeast Asian countries and tostrengthen their policymaking ability for Asiathrough dialogues with government officials,intellectual leaders and university students in theregion.

The visiting officials presented on the Japaneseeconomy and MITI’s role in revitalizing thefaltering economy and implementing trade policyfor globalization. After the presentation, the groupdiscussed issues on how Japan and Singapore

MITI officials (left) and Economics Departmentstudents (right) listening to a response duringQ&A session.

responded to the recent economic crisis, and onthe labor market situation in Japan, which ischanging from lifetime to more flexibleemployment. (Ms Irene Ng prepared this report)

7

department newsEconomic Society of Singapore Annual Seminar

The most recent annual ‘A’-level Seminar on“Understanding the Singapore Economy”, which ispresented by the Economic Society of Singapore (ESS)and organized by members of the Department andthe ESS secretariat, was held on Saturday 5th August2000 in the Auditorium of the Anglo-Chinese School(Independent) in Dover Road. A total of 1,094 JuniorCollege students and their teachers attended alongwith 42 members of the society from the corporate,administrative and academic worlds. The theme thisyear was the impact of globalization andtechnological change on the Singapore economy andthe nature of the government’s policy reactions.

The President of the Society, Assoc Prof AugustineTan of the Singapore Management University,opened the seminar with the Presidential addressin which he examined the claims about, and thedifferent understandings of the term, ‘NewEconomy’ and their relevance to Singapore.

The subsequent presentations were:• Assoc Prof Peter Wilson (Economics, NUS)

“Challenges Facing the Singapore Economy: Can

Economic Society of Singapore Annual SeminarSingapore Compete in the Premier League?”

• Mr. Edward Robinson (Senior Economist at theMonetary Authority of Singapore) “EnlightenedDiscretion in Monetary Policy Management”

• Dr Lu Ding (Economics, NUS) “Singapore’s E-Commerce Policy”

• Assoc Prof Koh Ai Tee (Economics, NUS) “TheSilicon Valley Model: Scope, Limits and Relevanceto Singapore” which was based on research sheis conducting with Dr Shandre MuganThangavelu.

• Assoc Prof Hoon Hian Teck (Economics, NUS)“Singapore’s Labor Market in an Age ofGlobalization and Skill-Biased TechnologicalChange.”

The seminar continues to attract a significantnumber students and teachers from a wide rangeof Junior Colleges. With the support of the ESSSecretariat, which is based in the Department, AssocProfs Gavin Peebles and Tay Boon Nga principallyorganized the Seminar. (Assoc Prof Gavin Peeblesprepared this write-up)

Economics Executive Program (EEP)Established in 1992, the EEP has grown inreputation over the years and firmly establisheditself as an effective Executive Training,Consultancy and Professional Development armof the Department.

The courses are specially tailored and designedprofessionally to meet the needs of senior andmiddle level executives. Listed among theclientele are government ministries and statutoryboards, including the Ministry of Defence,Ministry of Foreign Affairs, Ministry of Manpowerand the Institute of Policy Development. The EEPhas also partnered with the National Bureau ofEconomic Research (USA), InternationalDevelopment Research Centre (Canada), HansSeidel Foundation (Germany), and JapanInternational Cooperation Agency in offeringworkshops and training sessions.

For the second half of the year 2000, the EEPtrained over 150 participants, amongst whichwere middle and higher-level government officialsfrom Central Asia, ASEAN countries and China aswell as from the Civil Service of Singapore.

Economics Executive Program (EEP)

The following courses were offered during Juneto December 2000:

- Singapore Financial Management: 19 – 30June;

- ASEAN Economies: 31 July – 4 August;- Banking and Finance: 5 – 9 September;- Economics at Work: 18 – 20 September; &- Public Finance & the Economic Analysis of the

Government Sector: 16 – 20 October

Participants and Instructors of the Program onSingapore Financial Management.

8

Visitors to the DepartmentIn the second half of 2001, the Departmenthosted five distinguished visitors.

Professor Colin F Camerer

From 26 June to 8 July, the Department co-hosted with FBA and School of Computing(main host) the visit of Professor Colin FCamerer. Professor Camerer is a chair professorat the humanities and social sciences divisionof Caltech, and is a well-known experimentaleconomist. During his visit, Professor Camerergave four two-hour lectures based on hisforthcoming book on behavioral game theory.He had a meeting with Departmental staff on4 July.

Visitors to the DepartmentProfessor George Karg

Professor George Karg, Head of theDepartment of Household Economics in theTechnical University of Munich (TUM), visitedthe Department on 28 September. He had ameeting with Assoc Prof Euston Quah, DeputyHead, Assoc Prof Tay Boon Nga and Dr ChangYoungho and discussed the possiblecollaboration in teaching, research, andstudent exchange.

department news

Professor Amnon Rapoport

Professor Amnon Rapoport, who had visitedthe Department in February, was in NUS againbetween 17 to 19 July to explore the prospectsof setting up a Center for ExperimentalResearch and Policy Analysis in the Social,Behavioral and Managerial Sciences.A distinguished social and behavioralpsychologist who has also publishedextensively in Economics, particularly in gametheory, Professor Rapoport met withDepartmental staff on 17 July.

Professor Colin F Camerer

Professor Nguyen Van Thuong

Professor Nguyen Van Thuong, Vice-Rector ofthe National Economics University in Hanoi,Vietnam, visited the Department on 20October. Accompanied by his interpreter, Mr.Bui Van Hung, Professor Nguyen discussedpossible research and training collaborationwith Assoc Prof Euston Quah and Dr ShandreMugan Thangavelu.

Professor Andy Mullineux

Professor Andy Mullineux, Professor of Moneyand Banking in the Department of Economics,University of Birmingham, visited theDepartment on 6 Dec. The purpose of his visitwas also to explore research and teachingcollaboration.

Professor George Karg

9

Economic Policy Forum (EPF)The EPF hosts seminars on a wide range of policy issues. Details of papers presented at the EPF from July to Dec2000 are provided below:

Presenter Topic Date

1 Dr Cheolsung Park Labor Force Participation of Older Singaporean Workers: 10 AugustDept of Economics, NUS Role of Central Provident Fund Savings and Other Factors

2. Dr Zhu Lijing Infrastructure Investment in China 17 AugustDept of Economics, NUS

3. Dr Fredrik Sjoholm FDI and the Dynamics of Productivity: 29 AugustDept of Economics, NUS Microeconomic Evidence

4. Dr Liu Shaojia China’s Dual-Price System in the Transition: How market 5 SeptemberDept of Economics and Finance, prices outside the plan are determined?Brunel University, UK

5 Dr Ho Kong Weng The Changing Pattern of Production Fragmentation in 19 SeptemberDept of Economics, NUS Singapore and its Economic Consequences

6 Dr Pundarik Mukhopadhaya Income Gap and Educational Opportunity in Some Southern 10 OctoberDept of Economics, NUS Asian Countries: Government Efforts in Bridging Inequality

7 Professor Ari Kokko Employment and Plant Dynamics in Swedish MNCs 19 OctoberStockholm School of Economics,Sweden

8 Assoc Prof Thomas Snyder The Demand for Roads: Lessons from the Auto Ownership 24 OctoberPublic Policy Program, NUS and Road Pricing Schemes in Singapore

Economic Policy Forum (EPF)

department news

The Department organizes staff seminars on a weekly basis with the objective to provide an opportunity for thestaff as well as visiting economists to discuss their latest or on-going research, with topics ranging from puretheoretical to applied economics. The details of the papers presented from July to December 2000 are given below:

Presenter Topic Date

1 Dr Yong J Yoon “Politics as Tragedy: The Logic of Common Access 8 AugustGeorge Mason University, USA to Social Value “

2 Dr Dilip K Bhattacharyya The Hidden Economy Estimates and Their Implications for 22 AugustUniversity of Leicester and Government Expenditure: UK (1960-1990)IERC England, UK

3 Dr Paul David Mizen Base Rate Passthrough in UK Banks and Building Societies’ 31 AugustUniversity of Nottingham, UK Retail Rates”

4 Professor Rodney Tyers Capital-Skill Complementarity and Wage Outcomes 14 SeptemberAustralian National University, following Technical Change in a Global ModelAustralia

5 Dr Dyuti Banerjee Policies and Strategies to Prevent Software Piracy 21 SeptemberBond University, Australia

6 Dr Shandre M Thangavelu Technology Adoption, Education and Immigration Policies 26 SeptemberDept of Economics, NUS

7 Professor Michael McAleer Consumption, Liquidity Constraints, Uncertainty 28 SeptemberUniversity of Western Australia, and Temptation: An International ComparisonAustralia

8 Dr Alan Martina Diverse Groups Deciding on a System of Justice in 5 OctoberAustralian National University, Distribution: Evidence from the PhilippinesAustralia

9 Dr Yohanes Riyanto On the Design of Internal Organization of Innovation 1 NovemberUniversity of Groningen, Netherlands Process in a Firm

10 Dr Wong Siu Kee On Partial Factor Price Equalization 2 NovemberDept of Economics, NUS

11 Professor Srikanta Chatterjee Sixteen Years of Economic Reform: Results and the Lessons 16 NovemberMassey University, New Zealand from New Zealand

Staff SeminarsStaff Seminars

10

25th Conference of the Federation of ASEANEconomic Associations (FAEA 2000)The year 2000 saw the Economic Society ofSingapore (ESS) hosting the 25th Conference of theFederation of ASEAN Economic Associations (FAEA)at the Orchard Hotel on 7-8 September. Assoc ProfAugustine Tan, who assumed his position as Presidentof ESS as staff member of the Department, was theChairman of the FAEA. He gave the welcomingspeech and after this the Opening Address was givenby Mr Lim Hng Kiang, Minister for Health, SecondMinister for Finance and Board Member, MonetaryAuthority of Singapore.

The theme of the Conference was “Monetary andFinancial Management in Asia in the 21st Century”which mainly covered monetary and exchange ratemanagement and financial and corporategovernance. The first theme attracted suchprominent international economists as ProfessorRonald I. McKinnon of Stanford University and DrJohn Williamson, Senior Fellow at the Institute forInternational Economics. As part of the openingPlenary session, Professor McKinnon presented apaper entitled “After the Crisis: The East Asian DollarStandard Resurrected: An Interpretation of High-Frequency Exchange Rate Pegging”. His statisticalanalysis of pre-crisis and post-crisis East-Asianexchange rates, analyzed on a high-frequency basis(using daily or weekly data), led him to concludethat the crisis countries had returned to peggingagainst the American dollar. He then offered a theoryas to why emerging market governments would wishto maintain day-to-day stability against the Americandollar using the concept of “Original Sin” fromEichengreen and Hausmann. Dr. Williamson was notconvinced of the relevance of the inappropriatelynamed “Original Sin” concept. His presentation inthe plenary session was “Exchange-Rate regimes forEmerging Markets: Reviving the IntermediateOption”. In this presentation, he argued the caseagainst assuming that exchange-rate regime choicesare limited solely to the two “corner solutions” of arigidly fixed rate, possibly through a currency board,or the other “corner” of a free-floating regime butthat there is an “intermediate option”. This systemhas generally been called “crawling bands” but usingRudiger Dornbusch’s label he calls them BBC rules:“band, basket and crawl.” His presentation revealedhis disagreement with Professor McKinnon’s “paeanto the East Asian dollar standard”.

In the following sessions, participants from universitiesin Malaysia, Thailand, Indonesia, Philippines, Vietnam,and Singapore presented papers. In addition, a

25th Conference of the Federation of ASEANEconomic Associations (FAEA 2000)

representative from the Hong Kong MonetaryAuthority, Miss Priscilla K. Y. Chiu, gave a paper onthe experiences of the Hong Kong currency boardsystem. From the department of Economics, Dr KimYoonbai presented a paper “Exchange Rate Policy inSingapore: Current Issues and Empirical Evidence”which is based on joint research with Dr Chow HweeKwan of the Department of Economics. There wasalso a presentation about the nature and problemsof Stand-alone Internet Banking in Singapore. ThePanel discussion on the last day was chaired by MrPeter Seah, President and CEO of the Overseas UnionBank, and featured Professor McKinnon, DrWilliamson and Miss Priscilla K. Y. Chiu who all ablysummarized their viewpoints and the main pointsraised during the Conference. After the PanelDiscussion Dr John Williamson gave a lunch talkentitled “Curbing the Boom-Bust Cycle in Lendingto Emerging Markets: How can the IndustrialCountries Help?”

Dr Chow Hwee Kwan acted as MC for the Conferenceand together with Dr Lu Ding and Assoc Prof GavinPeebles chaired sessions. They also acted asdiscussants of various papers. Papers were presentedby academics from other departments of NUS andthey also acted as discussants and session chairmen.Assoc Prof Augustine Tan, Dr Lu Ding and Assoc ProfTay Boon Nga did the main organization of theConference with the support of the ESS secretariatand at the Conference itself several graduate studentsof the Department and other members of the ESSCouncil helped to ensure that events ran smoothlyand on time.

Participants were also able to visit the MonetaryAuthority of Singapore where they were given twobriefings on aspects of Singapore’s monetary policy

Chairman of the participating National Associationtogether with Professor Augustine Tan (third fromright), Dr John Williamson (extreme right) andProfessor McKinnon (fourth from left).

focus

11

focus

and the development of the financial sector followedby an interesting Q&A session.

The unexpected highlight of the Conference wasthe Closing Dinner, which through the good officesand connections of Professor Tan, was held at theIsland Country Club and featured a Dinner Talk byProfessor Robert Mundell, recipient of the 1999Nobel Prize for Economic Sciences. Conferenceparticipants, members of the university and others

were invited to attend. In a relaxed and unscriptedtalk, Professor Mundell magisterially reviewed thelast century of international monetary history andlinked it to the question of a common currency forAsia. He then responded to questions from the floor.

The Conference was a great success and there areplans to publish the papers and the discussants’comments soon. (Assoc Prof Gavin Peebles preparedthis write-up)

Associate Professor Euston Quah introducingDr David Lee.

Graduate Seminar: “Technical Issues inPractical Fund Management”As the Department’s graduate program kepton expanding, it organized its second graduateseminar on 27 September 2000 at 6pm in orderto engage its large pool of graduate students ina brainstorming session on a topical issue. DrDavid Lee, the Managing Director of Ferrell AssetManagement Private Ltd. and a former facultyof the NUS Graduate School of Businesspresented this year’s seminar. The topic,Technical Issues in Practical Fund Management,was an area in Economics that held great swayin the hearts of most graduate studentsattending the seminar.

After a brief introductory speech by Assoc ProfEuston Quah, the Coordinator of theDepartment’s graduate program, Dr Lee beganhis presentation with short witty snippets andanecdotes to create awareness and interest andat the same time to provide a historicalperspective to the theories behind FinancialEconomics. The advent of computers hadhowever obviated the “obsolescence” oftraditional models, and this then led Dr Lee tohis main topic, the application of Chaos Theory,also known as the Fractal Market Analysis, toinvestment and other related areas of Economics.

Using the Sierpinski Triangle, he explained thatseemingly random price movements in the stockmarkets have in fact determinate pattern andstructure on the macro level, although the patternsmay not be discernible on the micro level as revealedby modeling the market in the Fractal Space. TheFractal Market Hypothesis is also more flexiblebecause it does not necessitate assumptions on theunderlying distribution and adequately captureslong-term memory in time series.

Graduate Seminar: “Technical Issues inPractical Fund Management”

Besides technical issues, Dr Lee also addressedthe pertinent questions related to portfolio choiceand performance of global stock markets. Hestressed the need for diversification in portfolioselection and cautioned that economic growthis rather unrelated to stock market and one shouldnot assess the equity holdings by growth alone.He commented that buying Asian stocks in futuremight not be as rewarding as before because ofslow growth of earnings and continuinguncertainties in the region (particularlyIndonesia). He recommended biotech stocks forlong-term investment.

The lecture was followed by a stimulating Q&Asession. Graduate students participated activelyin the discussion and raised a number of questionson market efficiency, optimal rate of return,methods of assessing stock performance, and theprospect of Dow Jones and Nasdaq. The meetingended at 7:30 pm. (Leo Teng Wah, a graduatestudent, contributed to this write-up)

12

THAI MELTDOWN AND TRASMISSION OFRECESSION WITHIN ASEAN4 AND NIE4by Tilak AbeysingheForthcoming as a chapter in a book, InternationalFinancial Contagion: How it spreads and how it can bestopped, edited by Stijn Claessens and Kristine Forbes.Publisher: Kluwer Academic Publishing. (Available at:http://www.worldbank.org.contagion).

Using a multi-equation model that is capable oftransforming a trade matrix to output multipliers, thispaper investigates how the recessionary impulsesgenerated by the Asian financial crisis are transmittedacross borders. The basic transmission channel is trade.The contagion shocks are administered throughvariables like real exchange rate and credit flows. Thereal exchange rate effect is examined through twomeasures, relative consumer price index and relativeunit labor cost. The results suggest that realappreciation cannot be considered a cause of the Asiancrisis and it contributes very little in the process oftransmission of recession. The impact of the creditcrunch brought about by the currency crash and capitaloutflow is examined through indirect means. Theevidence presented in the paper suggests that althoughtransmission plays an important role in the mediumrun, the immediate economic contractions are largelya result of direct shocks that are attributable to “purecontagion”.

LIBERALIZATION, GROWTH AND THEASIAN FINANCIAL CRISIS: LESSONS FORDEVELOPING AND TRANSITIONALECONOMIES IN ASIAby Mohammed Ariff and Ahmed M KhalidEdward Elgar, 2000,544pp

This timely book examines the effects of financialliberalization in the more advanced economies ofSoutheast Asia. It also analyses the degree to whichemerging and transitional economies in East and SouthAsia can benefit from this example. The weakness ofthe banking sector is examined in order to explain thereasons behind the currency crisis and to prescribepolicies to avoid a similar episode in the future.

PROCURING HONEST RESPONSESINDIRECTLYby T.C. Chua and A.K.C. TsuiJournal of Statistical Planning and Inference, Vol. 90,2000, pp 107-116

We propose a new method for obtaining truthfulanswers to sensitive survey questions indirectly from adichotomous population. In the proposed method,each sample respondent is asked to report a numericalvalue chosen from two parallel set of multiple outcomesgenerated by arbitrary randomizing devices. We showthat the proposed estimator of the populationproportion is more efficient and general than thoseput forward by Warner (1965), Franklin (1989) andKuk (1990). Intuitively, our approach creates aremarkably respondent-friendly environment for eachinterviewee to discharge honest answers without thefear of exposing one’s identity. Two illustrative casesusing the normal and exponential distributions as

randomizing devices are performed to demonstratethe superiority of the proposed estimator.

SOCIAL EXPENDITURE AND ECONOMICGROWTH: EVIDENCE FROM JAPAN USINGCOINTEGRATION TECHNIQUESby Habibullah Khan & Ahmed M. KhalidSingapore Economic ReviewVolume 44, No. 2, 1999,36-55

The paper seeks to study the impact of socialexpenditures (education, health, and social security andwelfare) on economic growth by using the time series(1955-1994) data for Japan. We use cointegration testto analyze the long-run relationship between the GDPgrowth and education, health and social security shareto GDP. We further extend the study to test and identifythe direction of causality. We do not find any empiricalsupport for a long-run relationship between the threedifferent categories of social spending and theeconomic growth. The results, however, do support acausal relationship between these series.

A CROSS-COUNTRY STUDY OFTECHNOLOGY TRANSFER: VEHICLES,CONDITIONS, SPILLOVERS, AND POLICYCHALLENGESby Koh Ai Tee and Shandre ThangaveluThe Encyclopedia of Life Support Systems, UNESCO,2001 (forthcoming)

This paper reviews recent theoretical and empiricalliterature to underscore the main vehicles of technologytransfer from developed to developing countries, aswell as the conditions for, and results of, successfultransfer. Based on this literature, the paper conductsa cross-country examination of the conditions forsuccessful transfer and relates these to welfare andtechnology output indicators in the context of thesevehicles. The main finding is that host countries withhigh absorptive capacity, such as those in East Asia,tend to attract more technology inflow, which lead inturn, to high technology output and welfareperformance. Past success, however, is no guaranteefor future prosperity. East Asian countries will need topay greater attention to tertiary education if they wishto transit towards a high-technology growthequilibrium, and become knowledge-based economiesin the twenty-first century.

ONE-SIDED TESTING FOR ARCH EFFECTSUSING WAVELETSby Lee JinEconometric Theory (forthcoming)

We propose a one-sided test for ARCH effects usingwavelets. The test is based on a wavelet spectraldensity estimator at frequency zero of the square of aregression residual series. The square of an ARCHprocess is positively correlated at all lags, resulting ina spectral mode at frequency zero. Spectral peakoccurs at frequency zero when ARCH effects arepersistent or when ARCH effects are small at eachindividual lag but carry over a long distributional lag.We show that wavelets can effectively capture suchspectral peaks.

publications

13

AN EMPIRICAL STUDY ON PUBLICCAPITAL SPILLOVERS FROM UNITEDSTATES TO CANADAby David T. Owyong and Shandre M. ThangaveluApplied Economics, 2001 (forthcoming)

The effect of public capital on private sectorproductivity has received much attention in theliterature. The impact of an adjacent country’s publiccapital on domestic productivity has however not beenpreviously examined. This paper attempts to fill thisgap by examining the possibility of such spillovers fromUnited States to Canada. Due to close proximity ofboth countries, the hypothesis of the paper is that thesespillovers are important. A production function model,which closely follows Aschauer (1989), introducesUnited States public capital as an exogenous variableand tests for its significance. The results indicate positivespillovers from United States public capital to Canadianproductivity.

DO POOR COUNTRIES TEND TO GROWFASTER THAN RICH COUNTRIES?by V. V. Bhanoji Rao and Shandre M. ThangaveluApplied Economic Letters, 2000, 7, 629-632

The observation by Barro that cross-country evidenceis inconsistent with the hypothesis that poor countriestend to grow faster than rich countries is examined.The overall sample of countries employed in the Barrostudies is adjusted by excluding those with small samplesizes (less than 15 observations) and/or those with notstatistically significant trend growth rates. It is foundthat, in general, poor countries tend to grow fasterthan rich countries. However, this observation holdsespecially strongly for 17 countries with real per capitaproduct above $1000.

TFP GROWTH IN THE ELECTRONICSINDUSTRY OF SINGAPOREby Shandre M. Thangavelu and V. V. Bhanoji RaoSingapore Economic Review, Vol.44, 1999, 56-68

This paper highlights the trends in TFP growth in theelectronics industry. A finding of particular note is thatalmost all sub-sectors have registered improvementsin TFP growth during 1987-1995. Also, given the factthat the computer products & peripheral industry hasa more than 50 per cent share in electronics exports,it is encouraging to note that TFP growth in the sub-sector has been a robust 11.2 per cent during 1987-1995.

IMPACT OF PUBLIC CAPITAL ON THEMANUFACTURING PRODUCTIVEPERFORMANCE OF JAPANESEINDUSTRIESby Shandre M. Thangavelu and David T. OwyongApplied Economics, 2000, 32, 1515-1520

The paper analyses the impact of public capital on theJapanese manufacturing industries from 1970 to 1995.Unlike previous studies, which are based mostly oneconomy-wide analysis, this study is based on a

disaggregated analysis at the industry level. AGeneralized Leontief cost function is utilized to estimatethe impact of public capital on nine manufacturingindustries in Japan. The results indicate that publiccapital offers no insignificant contribution to theproductive performance of these manufacturingindustries except for Paper, Textiles and Transport. Thepaper also suggests that the bubble economy in the1980s is the contributing factor behind this insignificanteffect on public capital.

TIME SERIES MODELS WITH NONNORMALINNOVATIONS: SYMMETRIC LOCATION—SCALE DISTRIBUTIONSby Tiku, M L, W K Wong, D C Vaughan and G BianJournal of Time Series Analysis, Vol. 21, No.5, 2000, 571-596.

We consider $AR(q)$ models in time series with non-normal innovations represented by a member of a widefamily of symmetric distributions (Student’s $t$). Wederive the MML (modified maximum likelihoodestimators) of the parameters and show that they areremarkably efficient. We use these estimators forhypothesis testing and show that the resulting testsare remarkably powerful. We study the robustness ofthe proposed estimators and tests to deviations froman assumed model. Skew distributions will beconsidered in part II of this paper.

MAXIMUM LIKELIHOOD ESTIMATION OFARMA MODEL WITH ERROR PROCESSESFOR REPLICATED OBSERVATION’by Wong, W K, R B Miller and K Shrestha,Journal of Applied Statistical Science, 2000 (forthcoming)

In this paper we analyse the repeated time series modelwhere the fundamental component follows a ARMAprocess. In the model, the error variance as well as thenumber of repetition are allowed to change over time.It is shown that the model is identified. The maximumlikelihood estimator is derived using the Kalman filtertechnique. The model considered in this paper canbe considered as extension of the models consideredby Anderson (1978), Azzalini (1981) and Wong andMiller (1990).

INNOVATIVE VS. IMITATIVE R&D ANDECONOMIC GROWTHby Zeng JinliJournal of Development Economics (forthcoming)

This paper develops a multi-sector dynamic generalequilibrium growth model, in which innovationimproves product quality and imitation expandsproduct variety and both innovation and imitation canoccur simultaneously in the same sector. Within theanalytical framework so developed, we show that (i)subsidizing innovation and taxing imitation are notnecessarily equivalent in terms of their effects onimitation; (ii) an innovation subsidy always speeds upeconomic growth while an imitation subsidy alwaysdoes the opposite; and (iii) the welfare effects of bothinnovation and imitation subsidies are ambiguous.

publications

14

Staff members are actively involved in research and this is reflected in the growing number ofconferences attended by staff every year. Some of the overseas conferences that our staff membersparticipated from July to December 2000 are given below:

Staff Conference Title Title of Paper Venue Date

Dr Fredrik Sjoholm 75th Annual Conference of FDI and the Dynamics of Productivity: Canada 29 June-the Western Economic Microeconomic Evidence 3 JulyAssociation International

Assoc Prof Anthony 4th Air Transport Research Investment Decisions and Netherlands 2-4 JulyChin Group Conference Profitability of Airlines

Dr Lu Ding Developing through Industrial Policy and China’s China 5-7 JulyGlobalization: China’s Participation in GlobalizationOpportunities andChallenges in the New Century

Dr Zhu Lijing Greater China & the World Public Infrastructure Investment in the Hong Kong 17-18 JulyEconomy (Organized by City Transforming Chinese Economy:University of Hong Kong and A Dynamic Equilibrium AnalysisOthers)

Dr Yu Qiao 7th Asia-Pacific Finance Determinants of Foreign Direct China 24-26 JulyAssociation Annual Investment across ChinaConference

Professor Parkash Workshop on Environmental The Kyoto Protocol and Developing India 26-28 JulyChander Economics for IAS Officers Countries

Assoc Prof Anthony Second International Impact of the Road Pricing Scheme China 31 July-Chin Conference on Traffic & on Commuter Trip Departure Time 2 Aug

Transportation Studies

Professor Tse Yiu Kuen 8th World Congress of the A Multivariate GARCH Model with USA 11-16 AugEconometric Society Time-Varying Correlations

Dr Goh Ai Ting 8th World Congress of the Learning by Doing, Trade in Capital USA 11-16 AugEconometric Society Goods and Growth

Dr Lee Jin 8th World Congress of the One-sided Testing for ARCH USA 11-16 AugEconometric Society Effect using Wavelets

Dr Anthony Tay 8th World Congress of the Dynamic Regressions with Variables USA 11-16 AugEconometric Society Observed at Different Frequencies

Dr Kim Yoonbai KIF-KAEA Joint Seminar and A Common Currency Peg in East Asia South Korea 17-19 Aug9th International EconomicsConvention

Dr Shin Jang-Sup Annual International Globalization, Over-Investment, and South Korea 18-19 AugEconomic Conference of the Over-AdjustmentKorea Economic Association

Assoc Prof Anthony 21st Century Asia: Economic Role of Infrastructure and the Japan 26-27 AugChin Restructuring & Challenges Environmental Sustainability of Asian

of Megacities Megacities

Professor Mukul Asher Reconfiguring East Asia: The Social Security Institutions in Australia 28-29 AugRegional Institutions and Southeast Asia in the Aftermath ofOrganizations after the Crisis the Crisis

Dr Reza Yamora Siregar Financial Markets and Private Capital Flows in East Asia: Australia 4-5 SepPolicies in East Asia Boom, Bust and Beyond

Dr Souresh Saha 27th Conference of the R&D Composition over the Product Switzerland 7 –10 SepEuropean Association for Life CycleResearch in IndustrialEconomics

Dr Sougata Poddar (a) 27th Conference of the (a) Strategic Effect on Renting and Switzerland 7-10 SepEuropean Association for Selling in a Durable Goods MarketResearch in Industrial under Exchange Rate Uncertainty.Economics

conferences

15

Staff Conference Title Title of Paper Venue Date

Dr Sougata Poddar (b) International Conference (b) Network Externality and Software Netherlands 11-12 Sepon Copyright in the PiracyCultural IndustriesEconomics, Law andManagement

Dr Wang Jianguo 2000 Annual LACEA Meeting 1) Attitude Choice, Economic Change Brazil 12-14 Oct(Organized by the and WelfareFoundation Getulio Vargas) 2) Nature of the Firm: Why China’s

Township and Village EnterprisesOutperform State-OwnedEnterprises

Assoc Prof Hui Weng Tat International Migration and Foreign Manpower Policy and Taiwan 18-23 OctStructural Change in APEC Development Strategy in SingaporeMember Economies

Dr Lu Ding Workshop: China and Prospect of Industrial Policy Regime China 19-20 Octthe WTO after the WTO

Assoc Prof Jose Tongzon The 8th Malaysia-Singapore Singapore-Malaysian Ports: Malaysia 19-21 OctForum Competition or Cooperation?

Dr Pundarik The 8th Malaysia-Singapore Income Disparity and Equality in Malaysia 19-21 OctMukhopadhaya Forum Educational Opportunity

Dr Chia Ngee Choon Public Private Partnership in Public Private Partnership in Health Thailand 30 Oct-the Health Sector Care Financing and Health Care 3 Nov(Organized by ADB Institute) Delivery: The Case of Singapore

Dr Zhang Zhaoyong The Asian Retail and Internationalization of Retail Trade Japan 6 Nov-Distribution Forum in Asia 10 Nov

Dr Pundarik Southern Economic An Investigation of Regional Welfare USA 10-12 NovMukhopadhaya Association Meeting Disparity in Australia Using A

Generalized Social Welfare Function

Dr Fredrik Sjoholm Technology Development Technology Policy in Indonesia Indonesia 14-15 Decin East Asia(Organized by WBI)

Dr Liu Haoming First Biennial Conference of Does it pay to send your children to Hong Kong 14-16 Decthe Hong Kong Economic non-public schoolsAssociation on “The AsianPacific Economies in theNew Millennium”

Dr Lu Ding First Biennial Conference of Impact of China’s Industrial Policy Hong Kong 14-16 Decthe Hong Kong Economic Regime on Cross-Industry ResourceAssociation on “The Asian AllocationPacific Economies in theNew Millennium”

Dr Souresh Saha First Biennial Conference of Anti-trust Policy in the Context of Hong Kong 14-16 Decthe Hong Kong Economic Trade LiberalizationAssociation on “The AsianPacific Economies in theNew Millennium”

conferences

16

Welcome

The Department would like

to thank the following staff

for their dedicated service

to the University: Dr Aris

Ananta, Dr Iddamalgoda,

Dr Jacques Olivier, Dr David

Owyong, Mr Kelvin Tan,

Dr Tang Fang Fang, and

Madam Wu Wei who have

left or will be leaving the

Department soon.

All the bestWe wish to congratulate

Assoc Prof Mukul Asher

who was promoted to full

Professorship with effect from

1 August 2000 and now is

attached to the Public Policy

Program. We wish him all

the best.

WelcomeWe wish to extend a very warm welcome to the following new staff members (with details provided)who joined the Department between June and December 2000:

Name/Designation Academic Background

Dr Lee Soo Ann Previously he was in Public Policy Program. His areas ofAdjunct Senior Fellow research are: Normative Economics, Economic Development,Joined on 1 July 2000 Public Sector Economics

Dr Lee Jin PhD Cornell University, MA BA Seoul University.Assistant Professor His research interests are Time-Series Analysis and FinancialJoined on 5 July 2000 Econometrics

Dr Xie Feixue Faith PhD MA Pittsburg.Assistant Professor Her research interests are Investment and Corporate CapitalJoined on 5 July 2000 Structure

Dr Emily Cremers PhD Univ of Minnesota, BA Univ of Kentucky.Assistant Professor Her research interests are Dynamic Open Economics, EconomicJoined on 1 September 2000 Growth, Overlapping Generations Models, International

Economics, Macroeconomics, Asia-Pacific Economic Development

Ms Serene Tan Sze Ching BA with Merit and B.Soc.Sci NUS.Senior Tutor She left for overseas study at University of PennsylvaniaJoined on 17 July 2000 and is expected to return on 3 Aug 2004

Mr Aamir Rafique Hashim MA (Econs) Univ of Punjab, BA Government College, Jhelum.Teaching Assistant Currently he is enrolled for Master of Social SciencesJoined on 2 October 2000 (Economics) at NUS

Ms Siti Alida Binte Ali She is located in General Office IIManagement Support OfficerJoined on 12 June 2000

All the best CongratulationCongratulation

staff news

17

The National Economics Quiz 2000

The National Day Lecture (NDL), one of theEconomics and Statistics Society’s most prolificannual events, marks the efforts of the Society inpromoting community and national awarenessamongst graduates and pre-University students.

This year, Mr Lim Boon Heng, Minister withoutPortfolio and National Trades Union Congress(NTUC) chief, delivered the 8th NDL on August 22,attracting staff and students alike to occupy LT 13to its full capacity.

In his speech, the Minister stated the need for anew social contract for workers, as Singapore is inthe midst of an “epochal period of transition, fromindustrial to new, knowledge economy.”

The Minister saw three key issues that needed to beaddressed, namely workers’ employability; theprovision of a good quality- of- life for workers atthe lower end of the economy; and the balancebetween work and family in an economy whichworks 24 hours a day, 7 days a week. Ultimately, hesaid, trade unions would always be necessary toprovide support and guidance to workers, andstrengthen social cohesion. They would thus notturn into “dinosaurs in the New Economy”.

Mr Lim Boon Heng, Minister without Portfolio andNational Trades Union Congress (NTUC) chief,delivering the 8th National Day Lecture.

The National Day Lecture 2000The National Day Lecture 2000

Even so, trade unions also need to “evolve with thetimes and adapt to the new environment, in orderto be able to play their role effectively and meet theneeds of workers,” cautioned the Minister. “To doso, trade unions must attract workers, includingprofessionals. We must have capable union leaders,”he said, urging the undergraduates to appreciatethe importance of the profession. (Tay Shi’an, Headof Publications, Economics and Statistics Society,submitted this write-up)

student news

It was an exciting evening as the junior collegesvied for the top position in the 10th NationalEconomics Quiz, held on the 18th August at theProductivity and Standards Board (PSB)auditorium. This year, the Society was honoredto have Mr Khaw Boon Wan, Permanent Secretaryfor Ministry of Trade and Industry, as the Guest-of-Honor.

The event started with an opening address byMr. Khaw and then followed by a welcomespeech by Francis Tan, president of the ENS 37thManaging Committee. It then kicked off with 4exciting rounds of intense competition- theindividual round, speed round, presentationround and team round. Our contestants had tocombine agility with wit, presenting theireconomic knowledge and persuasive powers toconvince our judges of their positions.

The panel of judges comprised of Assoc Prof GavinPeebles, Dr Shendremugan Thangavelu and DrMark Donoghue. The winning team was RafflesJunior College, with Victoria Junior College, HwaChong Junior College and Anderson Junior

The National Economics Quiz 2000

College taking the second, third, and fourth prizesrespectively. The winners walked away with a$400 Borders book voucher as well as the LimChong Yah challenge trophy, through thecourtesy of Hitachi Asia Limited, sponsor for theNEQ for the fifth consecutive year. (Tay Shi’an,Head of Publications, Economics and StatisticsSociety, submitted this write-up)

The 10th National Economics Quiz organized by theEconomics and Statistics Society

18

Student Exchange Program (SEP)Every year, a group of students from NUS participatein the ‘Student Exchange Program’ (SEP). Under theprogram, students spend up to two semesters atPartner Universities overseas, studying equivalentcourses/modules that are credited towards theirdegrees at NUS. In this issue, two students from theDepartment share their experiences under SEP.

Teo Chu-Tat, JasonSEP University: George Washington University

When I was first asked to write a short article on myexperience here in DC for the Economics Newsletter, Iasked myself, what have I learnt here that is relevantto Singapore society.

Well, for starters, my life here has been, to say the least,interesting. With American culture being sowidespread, especially in Singapore, it wasn’t surprisingthat I could assimilate into the lifestyle easier than mostinternational students can. After all, we do get our fairloads of American sitcoms and movies. But how similaris it really to the stuffs we catch on our televisionscreens, one may ask. Pretty close enough, I wouldsay. However, there are certain aspects of life in DCthat could not be depicted in our television screens.That would be the interactions and to actually liveamong students of a truly diversified community.

We pride ourselves as a nation that is multi-cultural,but what we have is still basically a culture that ispredominantly Chinese. What I see in DC is different;it is a cosmopolitan state that embodies a truly multi-cultural society. Take my newfound friends for instance,my roommate is English, my neighbors are Americanswith Indian descent and the other is of Lebanese roots.Some of my good friends here belong to a Hispaniccommunity and others retain links with their Europeanheritage. America manages to capture a truly melting-pot concept of citizenship.

Apart from these, the individuality of each person isseen much stronger here compared to Singapore. Oursociety and culture has always focused on the collectiveinstead of the individual. That to me presents adifference of perspectives and understanding of howto go about doing things. The concept of the collectivebefore the self has been inculcated in us since we wereyoung, and I believe that allows the transference ofvalues that we hold close to us; the notion of familyties and filial piety for instance.

In my short stay here in the States, I have widened myperspectives, expand my horizon and filled my heartwith memories that cannot be erased. I have

Student Exchange Program (SEP)experienced a learning culture that is different fromSingapore and one of my lecturers virtually takes theold teaching manual and flung it out of the window.She has managed to inspire me, to challenge my mind,to take me to a new plane and gave me a quest forknowledge that I never had. And I think that is oneaspect teaching should be having- to inspire.

I would like to end this note by expressing my gratitudefor giving me an opportunity to share my experiencewith the Student Exchange Program.

Ng Lin LiSEP University: Simon Fraser University

Being in Canada on the exchange program has beeneverything I expected the place to be: Different.

On the first day of school, I had to take a bus to thedowntown campus for lessons, but the bus never came.The bus drivers were on strike! Friendly Canadians atthe bus stop assured me that this was not a frequentoccurrence at all, and I managed to reach mydestination by sharing a taxi with some other students.There were about twenty people in that sociology class,and I learnt an important thing that morning, one isnever too old to be back in school and learn somethingnew. People of various backgrounds and ageintroduced themselves; discussions in class are alwaysan exchange of perspectives and experiences from allthese different and varied sources. Most of myclassmates juggle work and school, and also a vibrantsocial life, be it volunteering at the ‘Inner city Kitchen’and giving out free food to the homeless, activelypromoting environmental issues, acting in plays orgoing to the pub. Cindy, a middle-aged lady whom Ioften sit with in class, runs her own hairdressing salon.She is back in school because she wants to go to lawschool next year after she graduates, and help abusedwomen and children in court legislation.

The pace of learning is enjoyable to me. There arealways readings to do, which are not shadowed bythe thought of having to regurgitate them in a three-hour exam, and much of my reading currently is basedon the topics, which I have to do semester researchpapers for. Students here work conscientiously, partlybecause thy pay their own fees, and also take pride intheir pet projects and papers, thus put much thoughtand time into writing them. The grading system is suchthat the final exam (if there is one) takes a relativelysmall percentage. For example, in one of my courses –Processes of Development, grading is based on a bookreview on any book by a prominent writer in the field,a two- hour presentation (in groups), an assignment,

student news

19

student news

Student Internship Program (SIP)The 2000 Student Internship Program was held from15 May to 26 June 2000 and four students from ourDepartment were interns at various governmentministries.

Law Swee Ling, Sharon Anne was attached to theMinistry of Communications and InformationTechnology (MCIT), Sea and Air division. She worked(jointly with Chio Li Shin, another intern) on a project,“Study the investment patterns of the major port operatorsand discuss the implications for Singapore” that wasaimed to study the trends in the shipping and portbusinesses as well as the investment patterns of portoperators (particularly, Port of Singapore Authority orPSA), both in the region and internationally. Althoughher research was mainly based on interviews withindustry players and government officials, she alsoapplied some economic concepts (such as “gradualistapproach” to tackle inflation) that she learnt at NUS.

Anne benefited from SIP in many ways. She learnt thewhole process of policy making and acquired somesoft skills from other interns and ministry officials. Shealso appreciates the work environment that was veryfriendly and free from intervention. Finally she says,“The SIP gave me an unforgettable glimpse of working-life in the civil service. Now, armed with newly acquiredknowledge and (hopefully!) a more matured outlooktowards life, I feel more confident meeting new peopleand articulating my views and opinions. As reluctant Iwas to head back to my textbook days, I know I amdefinitely going to treasure my remaining years in NUSand enjoy it while it lasts”.

Chio Li Shin was also attached to the Ministry ofCommunication and Information Technology (MCIT)and she worked with Sharon on the same researchproject (mentioned earlier). Other than learning on

Student Internship Program (SIP)Singapore’s shipping and marine industry, She alsogained a first-hand knowledge on basic research skills,interaction with people, art of presentation, andcorporate culture. She made several suggestions forfurther improvement of SIP. For example, she suggeststhat each intern should be assigned two short projectsunder two different supervisors (rather than one). Thiswill give the interns a feel of working under differentleadership and management style, she believes. Shealso feels that the interns should be paired up with apermanent staff in a joint project in order to enhanceon-the-job training. On the whole, the internship wasan enriching experience for Li Shin.

Soon Sher Rene was attached to the Ministry of Tradeand Industry. She worked on a project “Private sectorparticipation in the development of industrial parks”that sought to identify lessons for Singapore by makinga worldwide survey of industrial and technology parks.She very much enjoyed the project work that involvedextensive use of the internet, the resource libraries, visitsto industrial sites and interviews. In all, Rene foundthe SIP very fruitful as she could make many friendsand gained a greater insight into the functions andworking of civil service.

Jessica Teo Sze Ting was attached to the ResourceDepartment of the Ministry of Trade and Industry (MTI)and she was given the task of researching on watermarkets in the international arena. She found theinternship program highly beneficial. “It gave me anopportunity to perform professional duties in a ministry,which are challenging and interesting. This workingexperience has enabled me to acquire a practicalknowledge and worthwhile experience in governmentadministration and there indeed lies a possibility of afuture career in Singapore Civil Service”, she said.

a short test and class participation. I had a lot of funwith the presentation as my group and I put togetheran informative yet entertaining session using songs,role-play, puppets and documentary video segmentsand finally a discussion with the class, complete withcostumes and humor.

“Off the Hill”, or outside of school, there are manybeautiful and scenic sights that I have visited withfriends. Vancouver is surrounded by many mountains,(which are patronized by skiers later in the year), and

though it took a while to reach the summit of theGrouse mountain, the view from the peak was simplybreathtaking, in both senses of the word since we werepanting so hard and exhausted from hiking up. StanleyPark is a sprawling landscape along the coast completewith a cycling track, fishing platforms interspaced bybeaches, green playing fields, flower beds and manymaple trees. My favorite place is Deep Cove, a cozyinlet sheltering a short street of quaint shops and cafes,a wonderful place to sit back and relax with a book inhand and perhaps ice cream in the other.

20

EditorAssoc Prof Habibullah Khan

Editorial TeamAssoc Prof G ShantakumarAssoc Prof Gavin PeeblesAssoc Prof Jose TongzonDr Paul HooperMs Connie ChungMs Irene NgMs Sabrina TanMs Sagi KaurMs Wong Marn Heong

For any suggestions, feedback or otherinformation which you would like to sharewith us, just drop us a note, or e-mail us at:

ecstancp@nus.edu.sg

or

ecssk@nus.edu.sg

or check out our website athttp://www.fas.nus.edu.sg/ecs

Do we have your correct name & address?If not, please fill in the form below & sendit to:

The EditorEconomics NewsletterDepartment of EconomicsFaculty of Arts and Social SciencesNational University of SingaporeAS 2, 1 Arts LinkSingapore 117570

✄Name:

Address:

Tel(H):

Tel(O):

Fax(if any):

Stay in TouchStay in Touch

We would like to thank all those who havecontributed to this issue of The EconomicsNewsletter.

Although our staff has been attending internationalconferences regularly, very few students have had theopportunity to do so. Hazel Yuen, a Ph.D. student inthe Department, who attended three internationalconferences (held in Malaysia, Thailand, and USArespectively) in the past one year, feels thatparticipating in conferences is a most rewardingexperience for a graduate student as it not onlyprovides necessary exposure but also the platform tostimulate further exchanges and discussion. It isespecially helpful if the conference is directly relevantto the researcher’s topic, she stresses. To those whoaspire to attend conferences in future, she has thefollowing advice: Be passionate in your subject (it is“contagious”), and do not be afraid to articulate yourthoughts, because with interaction will there be betterprogress.

Choy Keen Meng, another Ph.D student in ourDepartment, considers himself extremely fortunateto be able to present a paper “Sources ofMacroeconomic Fluctuations in Singapore” in the FarEastern Meeting of the Econometric Society (FEMES)held on 1-3 July 1999 at Mandarin Hotel, Singapore.He has benefited from the conference in many ways.He received constructive comments on his paper thatwas one of the core chapters of his dissertation andcould interact with many specialists that includedsome of his lecturers from home and abroad. He alsohad the rare opportunity to listen to renownedeconometricians such as Professors Granger andPhillips on their respective areas of expertise (such astime series econometrics and nonlinear integration).

Hazel Yuen (fourth from left) with a few otherparticipants of the conference on “Common Currency inEast-Asia”, August 1999, Penang, Malaysia.

student news

Graduate students attendinginternational conferencesGraduate students attendinginternational conferences