Amid pressure for easy solutions and better tools, economists’ discipline is key: PM Wong
They have to act based on the principles of economics – price, cost, incentives – when shaping policy decisions
Even when Singapore’s economists face mounting pressures to act quickly or pursue easy policy solutions, or are granted access to advanced tools, they must maintain discipline and adhere to economic principles, according to Prime Minister Lawrence Wong. Speaking at the 25th anniversary dinner of the Economist Service, Wong emphasized that "basic principles of economic thinking have stood the test of time."
These principles – prices, costs, and incentives – aid in clearer decision-making, understanding trade-offs, and anticipating consequences. Wong, who was one of the five economists in the Economist Service when it was established in 2001, highlighted three such principles: prices matter as signals for resource allocation and conservation, costs matter as policies have both direct and opportunity costs, and incentives matter as people's behaviors change in response to them.
Wong warned that well-intentioned policies can have unforeseen costs later and cautioned that while advanced tools are available, they should not replace good judgment. The Economist Service, now comprising more than 100 economists, stresses disciplined policy-making and the ability to recognise second- and third-order consequences.
Written by urgent.news from The Business Times - Singapore's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
