Welcome to Koby Time, a podcast series on markets and economies from Devi Coop Research. I'm chief economist. Welcoming you to our 106th episode. Our guest today is Orbin Lush, assistant Professor of Finance at the Lion School of Business University.

Welcome to Koby Time, a podcast series on markets and economies from Devi Coop Research. I'm chief economist. Welcoming you to our 106th episode. Our guest today is Orbin Lush, assistant Professor of Finance at the Lion School of Business University.

Professor Kosh is deeply involved in the financial literacy running a program for young adults. He's also the founding principal investigator of the quarterly DVSSKBIS index project. We'll talk about that in greater detail in the podcast over the past decade. Uh Professor Kosher has worked diligently on building surveys and models of inflation expectations in Singapore and remains hard at work in refining measures of cost of living work is very

Professor Kosh is deeply involved in the financial literacy running a program for young adults. He's also the founding principal investigator of the quarterly DVSSKBIS index project. We'll talk about that in greater detail in the podcast over the past decade. Uh Professor Kosher has worked diligently on building surveys and models of inflation expectations in Singapore and remains hard at work in refining measures of cost of living work is very

timely given the sport and cost of living we have seen in past few years worldwide, not just in Singapore. One additional point. Professor go along with Amit Helder and Kan Poe are the editors of a book that was published last year. It is a collection of multidisciplinary essays titled Managing Complexity and COVID-19. Life Liberty or The Pursuit of happiness. Remember those trade-offs we have to deal with.

timely given the sport and cost of living we have seen in past few years worldwide, not just in Singapore. One additional point. Professor go along with Amit Helder and Kan Poe are the editors of a book that was published last year. It is a collection of multidisciplinary essays titled Managing Complexity and COVID-19. Life Liberty or The Pursuit of happiness. Remember those trade-offs we have to deal with.

This book is all about that and I recommend it highly. Not least because I had the honor of contributing a chapter in it as well on that note, or the coach. Welcome to Kobe time.

This book is all about that and I recommend it highly. Not least because I had the honor of contributing a chapter in it as well on that note, or the coach. Welcome to Kobe time.

Thank you so much for having me.

Thank you so much for having me.

It's uh great to have you here. Uh Though I want to devote a large chunk of our discussion on your research on cost of living. And uh I have been in D BS for six years when I first joined, you reached out to me and that led to this partnership between my Bank

It's uh great to have you here. Uh Though I want to devote a large chunk of our discussion on your research on cost of living. And uh I have been in D BS for six years when I first joined, you reached out to me and that led to this partnership between my Bank

Ds and your institute has in Boon at SMU and John, we have been doing this quarterly study of inflation expectations. So give us some background. So what was the motivation? What made you go ahead with this and give us a sense of how you go about doing this survey?

Ds and your institute has in Boon at SMU and John, we have been doing this quarterly study of inflation expectations. So give us some background. So what was the motivation? What made you go ahead with this and give us a sense of how you go about doing this survey?

Sure, I mean, uh thanks for having me once again in your, you know, may I say celebrated an insightful podcast uh going well past a century of episodes. You know, it's a hard thing to capture imagination for a while. But if you have done it for over a century episodes, that's amazing.

Sure, I mean, uh thanks for having me once again in your, you know, may I say celebrated an insightful podcast uh going well past a century of episodes. You know, it's a hard thing to capture imagination for a while. But if you have done it for over a century episodes, that's amazing.

So an opportunity that of course, you embarked on to connect experts to audience and presented, presented in a crisis of its own during the pandemic, as you rightly mentioned about the book, which was also kind of induced by the pandemic lockdown if I may say so. So in some sense, you know, sometimes opportunities that comes in, comes in the form of crisis. And that's almost, that's exactly what happened for the genesis of the Singapore

So an opportunity that of course, you embarked on to connect experts to audience and presented, presented in a crisis of its own during the pandemic, as you rightly mentioned about the book, which was also kind of induced by the pandemic lockdown if I may say so. So in some sense, you know, sometimes opportunities that comes in, comes in the form of crisis. And that's almost, that's exactly what happened for the genesis of the Singapore

of inflation expectations, which we are very happy to have D BS supporting over the last, you know, 55 years or so since we joined uh D BS as well. So indeed, one of the things that happened was goes back in time to the global financial crisis in 2020 08, 20 09, when inflation rates started climbing up early in 2010 to over 5% globally.

of inflation expectations, which we are very happy to have D BS supporting over the last, you know, 55 years or so since we joined uh D BS as well. So indeed, one of the things that happened was goes back in time to the global financial crisis in 2020 08, 20 09, when inflation rates started climbing up early in 2010 to over 5% globally.

So uh Singapore economy uh could have been very adversely affected at that time as there was no real market driven measures of inflation expectations like the treasury, inflation protected security which is available, the available in the US. And uh there was of course a risk of unhinged inflation

So uh Singapore economy uh could have been very adversely affected at that time as there was no real market driven measures of inflation expectations like the treasury, inflation protected security which is available, the available in the US. And uh there was of course a risk of unhinged inflation

expectations which might have been detrimental to the effectiveness of monetary policy in any economy and particularly for a small open economy like Singapore which imports most of its consumables and follows an exchange rate based monetary policy as opposed to an interest rate based monetary policy.

expectations which might have been detrimental to the effectiveness of monetary policy in any economy and particularly for a small open economy like Singapore which imports most of its consumables and follows an exchange rate based monetary policy as opposed to an interest rate based monetary policy.

So the main concern that was highlighted by policymakers back in the US Federal Reserve Chairman Ben Bernanke, as well as ST Louis Federal Reserve President James Bullard on the possibility of unanchored or unhinged inflation expectations relative to the forward guidance provided by the central banks. So Sinex Survey started not to second guess the inflation rate

So the main concern that was highlighted by policymakers back in the US Federal Reserve Chairman Ben Bernanke, as well as ST Louis Federal Reserve President James Bullard on the possibility of unanchored or unhinged inflation expectations relative to the forward guidance provided by the central banks. So Sinex Survey started not to second guess the inflation rate

itself that was measured by agencies in Singapore, but to measure the impact of anchoring of inflation expectations. So is that that that forward guidance landing in the right place, are people believing that based on their own experiences? So we conduct the online survey. Uh It's interviews which is through a well researched questionnaire developed over the last 10 years,

itself that was measured by agencies in Singapore, but to measure the impact of anchoring of inflation expectations. So is that that that forward guidance landing in the right place, are people believing that based on their own experiences? So we conduct the online survey. Uh It's interviews which is through a well researched questionnaire developed over the last 10 years,

years or so. A random sample of 400 to 500 consumers in Singapore who roughly represent the demographic distribution of age and gender. The S index survey originated back in 2011, as I mentioned in September from uh collaboration at that time with mastercard and the Sim Bone Institute of Financial Economics to address essentially the problem of how do you measure inflation expectations to begin with?

years or so. A random sample of 400 to 500 consumers in Singapore who roughly represent the demographic distribution of age and gender. The S index survey originated back in 2011, as I mentioned in September from uh collaboration at that time with mastercard and the Sim Bone Institute of Financial Economics to address essentially the problem of how do you measure inflation expectations to begin with?

So how many rounds of the survey have we done so far?

So how many rounds of the survey have we done so far?

So we have completed 48 quarterly rounds of the survey. So that's uh really 12 years of the survey that in that sense, it's probably one of the longest survey uh that is not funded through the central bank. So in a way, a privately run uh survey which is of course followed by the central bank for this long. So 48 is, is an amazing series of data we are waiting for, of course, more and more information to come in as well. But the what we have so far is a treasure trove of, of data as well.

So we have completed 48 quarterly rounds of the survey. So that's uh really 12 years of the survey that in that sense, it's probably one of the longest survey uh that is not funded through the central bank. So in a way, a privately run uh survey which is of course followed by the central bank for this long. So 48 is, is an amazing series of data we are waiting for, of course, more and more information to come in as well. But the what we have so far is a treasure trove of, of data as well.

Yeah, absolutely. Uh Give us a sense of your key impressions from this totality of the work. And also give us a sense of your view about how useful have these been and who are the uh primary consumers of the insights that these surveys generate?

Yeah, absolutely. Uh Give us a sense of your key impressions from this totality of the work. And also give us a sense of your view about how useful have these been and who are the uh primary consumers of the insights that these surveys generate?

So, uh

So, uh

so let's go back to this idea of inflation expectations for a second. Uh So inflation expectation can easily be a self fulfilling prophecy, at least in the downside.

so let's go back to this idea of inflation expectations for a second. Uh So inflation expectation can easily be a self fulfilling prophecy, at least in the downside.

So if there is uh there is some trigger or some reasons to believe that inflation will actually go up,

So if there is uh there is some trigger or some reasons to believe that inflation will actually go up,

then individuals will make actually decisions uh to buy big ticket items right away, which of course becomes uh something uh uh something like a self fulfilling prophecy with prices in the short run going up. And similarly, if they expect prices to come down, and that might also happen to some extent. So what we did at the beginning of the study is to survey individuals rather than households. And this is an online survey because the turnaround time is, is is much sooner

then individuals will make actually decisions uh to buy big ticket items right away, which of course becomes uh something uh uh something like a self fulfilling prophecy with prices in the short run going up. And similarly, if they expect prices to come down, and that might also happen to some extent. So what we did at the beginning of the study is to survey individuals rather than households. And this is an online survey because the turnaround time is, is is much sooner

and we had over the last 12 years. Uh We have seen several different incidents. I mean, it's important to mention that that it was not just a flat uh flat uh process of getting the data, but what we saw in that particular period is of course a zero lower bound existing for a while. And then we also saw an even negative interest rate in the eurozone and Japan taper tantrums back in 2013 where fed, declaring a rate cut

and we had over the last 12 years. Uh We have seen several different incidents. I mean, it's important to mention that that it was not just a flat uh flat uh process of getting the data, but what we saw in that particular period is of course a zero lower bound existing for a while. And then we also saw an even negative interest rate in the eurozone and Japan taper tantrums back in 2013 where fed, declaring a rate cut

cut back on the bond bond buying back for quantitative easing if you remember that. And then of course, uh besides that, you had seen a slump and a revival of oil prices and 100 year old, you know, once in 100 year pandemic, that that of course kind of disrupted life across the board. So all of these things means that we have significant variations of inflation expectations. Now, our impression going back to your question was that the, the the

cut back on the bond bond buying back for quantitative easing if you remember that. And then of course, uh besides that, you had seen a slump and a revival of oil prices and 100 year old, you know, once in 100 year pandemic, that that of course kind of disrupted life across the board. So all of these things means that we have significant variations of inflation expectations. Now, our impression going back to your question was that the, the the

the SSKB IC Pix, which is what we call the headline inflation expectation has been fairly stable, it has been fluctuating but it has been fairly stable and it is kind of finding its position, uh you know, similar to what a longer term. Uh more I would say, uh you know, average value of inflation expectation would be without severe fluctuations along the way. And it seems to be some somewhat straddling between the outcome that we see

the SSKB IC Pix, which is what we call the headline inflation expectation has been fairly stable, it has been fluctuating but it has been fairly stable and it is kind of finding its position, uh you know, similar to what a longer term. Uh more I would say, uh you know, average value of inflation expectation would be without severe fluctuations along the way. And it seems to be some somewhat straddling between the outcome that we see

of the current inflation rate and what the experts in this case, the survey of professional forecasters have been, have been uh forecasting over, you know, quarterly as well. But one of the key impressions that we found out is like it does suffer from certain issues like, you know, behavioral biases that we will talk about later as well. But more importantly, it is identifying the change points quite accurately, particularly when uh the the market is seeing sort of a

of the current inflation rate and what the experts in this case, the survey of professional forecasters have been, have been uh forecasting over, you know, quarterly as well. But one of the key impressions that we found out is like it does suffer from certain issues like, you know, behavioral biases that we will talk about later as well. But more importantly, it is identifying the change points quite accurately, particularly when uh the the market is seeing sort of a

of inflation. So to say going forward, we are, we are finding that that's quite, quite accurate as well going forward and looking at the data that is coming out later. And also in some sense, the level hasn't been because it's quarterly. So in a in a sense, medium term, it is not short term or monthly. So we don't see that much of fluctuation in the inflation expectations as well. It has been to some extent, predictive, I will give some examples as well of how

of inflation. So to say going forward, we are, we are finding that that's quite, quite accurate as well going forward and looking at the data that is coming out later. And also in some sense, the level hasn't been because it's quarterly. So in a in a sense, medium term, it is not short term or monthly. So we don't see that much of fluctuation in the inflation expectations as well. It has been to some extent, predictive, I will give some examples as well of how

rate panned out in the next period. Uh But at the same time, what it has done is it has actually been used as part of a dashboard that the central bank also uses it to to come up with, with their sort of prediction or, or or policy mechanism as well in Singapore. So there has been some differences from what we see out there and how the central bank has might

rate panned out in the next period. Uh But at the same time, what it has done is it has actually been used as part of a dashboard that the central bank also uses it to to come up with, with their sort of prediction or, or or policy mechanism as well in Singapore. So there has been some differences from what we see out there and how the central bank has might

have changed their policy to some extent. But it's very hard to identify that every time this inflation expectation goes up that will actually have a reaction in uh in uh central bank policy as well. So I think it has been fairly persistent in that sense as as is expected of inflation expectations, but it has not suffered from undue fluctuations that uh that would suggest that inflation has been unanchored for a while as well.

have changed their policy to some extent. But it's very hard to identify that every time this inflation expectation goes up that will actually have a reaction in uh in uh central bank policy as well. So I think it has been fairly persistent in that sense as as is expected of inflation expectations, but it has not suffered from undue fluctuations that uh that would suggest that inflation has been unanchored for a while as well.

So just to expand on your point, you made earlier that it is not that useful to sort of take the exact point estimate of the survey expectation. So maybe people might say, I expect prices to go up by 10% to you. More interesting is, are they saying that in relationship to the fact that they used to say my inflation expectation is eight, meaning it's gone up or if they're saying 10 and they're saying going forward my expectations

So just to expand on your point, you made earlier that it is not that useful to sort of take the exact point estimate of the survey expectation. So maybe people might say, I expect prices to go up by 10% to you. More interesting is, are they saying that in relationship to the fact that they used to say my inflation expectation is eight, meaning it's gone up or if they're saying 10 and they're saying going forward my expectations

is seven. So that rationality is far more informative than the actual number which can be subject to, you know, all sorts of biases. Um And uh and I think that is an important takeaway from the work that you do. Um So let's stay with that point. And let's go to the more

is seven. So that rationality is far more informative than the actual number which can be subject to, you know, all sorts of biases. Um And uh and I think that is an important takeaway from the work that you do. Um So let's stay with that point. And let's go to the more

results of the recent years of the survey. So how have inflation expectations in Singapore evolved in the past few years? And what is the latest survey saying?

results of the recent years of the survey. So how have inflation expectations in Singapore evolved in the past few years? And what is the latest survey saying?

So uh so, of course, in the past few years, we have seen fluctuations on both sides. So during the pandemic period, uh inflation really slumped, inflation expectations also slumped together with it. And then it kind of picked up, you know what we are seeing that right around after the vaccine was essentially discovered and deployed inflation expectations, particularly in certain sectors like housing

So uh so, of course, in the past few years, we have seen fluctuations on both sides. So during the pandemic period, uh inflation really slumped, inflation expectations also slumped together with it. And then it kind of picked up, you know what we are seeing that right around after the vaccine was essentially discovered and deployed inflation expectations, particularly in certain sectors like housing

and other commodities started going up and picking up as well. In Singapore being a small open economy which is affected by and imports most of this stuff from elsewhere. There has been some impacts that we see that is reflected. So a couple of them I will mention so one is of course increase in oil prices that has an impact and and you see certain increase in the inflation expectations in the post

and other commodities started going up and picking up as well. In Singapore being a small open economy which is affected by and imports most of this stuff from elsewhere. There has been some impacts that we see that is reflected. So a couple of them I will mention so one is of course increase in oil prices that has an impact and and you see certain increase in the inflation expectations in the post

period as well. And then we see certain pass through costs which are also related indirectly where there was restrictions on movement of people. So there was certain impact on the wage rates that are passed through that go goes into the prices as well as you know, uh you know, accommodation cost, which has also kind of gone up as well. So overall, in the recent period, we found out that well,

period as well. And then we see certain pass through costs which are also related indirectly where there was restrictions on movement of people. So there was certain impact on the wage rates that are passed through that go goes into the prices as well as you know, uh you know, accommodation cost, which has also kind of gone up as well. So overall, in the recent period, we found out that well,

inflation expectations, what what Singaporeans believe uh has gone up, but the rate of increase has soft or, or kind of mitigated off late. So it is not going up as fast as initially about a year back, but it is now kind of tempered, it's not going down yet, at least from the current survey. But the the rate of increase which is sort of the slope has sort of dampened to some extent.

inflation expectations, what what Singaporeans believe uh has gone up, but the rate of increase has soft or, or kind of mitigated off late. So it is not going up as fast as initially about a year back, but it is now kind of tempered, it's not going down yet, at least from the current survey. But the the rate of increase which is sort of the slope has sort of dampened to some extent.

Great. Uh OK. So now you talked a little bit about professional analysts and inflation expectations. Uh So let's get into that. Um Singapore is full of banks, financial institutions, academics. So there are lots of professional forecasts are out there who follow price developments in Singapore and make forecasts. Not to mention the government agency do the same. Uh and now you have about, you know, 12 years worth of data, surveying

Great. Uh OK. So now you talked a little bit about professional analysts and inflation expectations. Uh So let's get into that. Um Singapore is full of banks, financial institutions, academics. So there are lots of professional forecasts are out there who follow price developments in Singapore and make forecasts. Not to mention the government agency do the same. Uh and now you have about, you know, 12 years worth of data, surveying

day to day Singaporeans and getting their inflation expectations. What is the relationship between these two?

day to day Singaporeans and getting their inflation expectations. What is the relationship between these two?

Yeah, that's, that's a very good question. And the reason it's a very good question is that your expectation, you know, before any data that you look at would be that typically your uh your consumers on so called the the the layperson on the street who are making economic decisions will be following the experts opinion about where inflation is going to head to.

Yeah, that's, that's a very good question. And the reason it's a very good question is that your expectation, you know, before any data that you look at would be that typically your uh your consumers on so called the the the layperson on the street who are making economic decisions will be following the experts opinion about where inflation is going to head to.

But we tend to see something slightly different. We find out that well, while the professional economists, in this case, private sector economists are probably more informed because they are closely linked with the bank policies, both the central bank as they are, you know what they see in the data as well. So they are sort of more in line with what what the expectations of the central bank would be and you would expect the consumers

But we tend to see something slightly different. We find out that well, while the professional economists, in this case, private sector economists are probably more informed because they are closely linked with the bank policies, both the central bank as they are, you know what they see in the data as well. So they are sort of more in line with what what the expectations of the central bank would be and you would expect the consumers

will be less informed of that and they would have sort of their own independent movement maybe tracking the what the professional economists do now, since the survey that we run is actually run about a week after the survey of professional forecasters are released, we expected that particular linkage, that means that the individual respondents are going to follow the experts. But we see a sort of different cycle.

will be less informed of that and they would have sort of their own independent movement maybe tracking the what the professional economists do now, since the survey that we run is actually run about a week after the survey of professional forecasters are released, we expected that particular linkage, that means that the individual respondents are going to follow the experts. But we see a sort of different cycle.

It seemed like it seems like that actually the experts are following the individual respondents. So which is kind of strange because you, when you and and I'll give you the reasons for it. So back in 2012, so it started in 2011. Back in 2012, we looked at the quarterly data on the last quarter of 2011, 1 year ahead. So that was around 4.6%

It seemed like it seems like that actually the experts are following the individual respondents. So which is kind of strange because you, when you and and I'll give you the reasons for it. So back in 2012, so it started in 2011. Back in 2012, we looked at the quarterly data on the last quarter of 2011, 1 year ahead. So that was around 4.6%

percent. That is as, as I mentioned, the genesis was because there was a spike in inflation rate at that time, uh global was around 5%. So we saw that it was about 4.6% 1 year ahead. And it turned out strangely enough, that's the only time it has happened one year later. From the actual data, the inflation rate, quarterly inflation rate, uh actually the the yearly inflation rate of 2012 was 4.6%. It was exact, but the professional forecasters actually surveyed at 3.1%.

percent. That is as, as I mentioned, the genesis was because there was a spike in inflation rate at that time, uh global was around 5%. So we saw that it was about 4.6% 1 year ahead. And it turned out strangely enough, that's the only time it has happened one year later. From the actual data, the inflation rate, quarterly inflation rate, uh actually the the yearly inflation rate of 2012 was 4.6%. It was exact, but the professional forecasters actually surveyed at 3.1%.

So which seems like that well, somehow the expectations that consumers had was better anchored and the final outcome one year later than the experts. And since then, it seems like it was a little bit of catch up for the experts to catch up to what the consumers are saying.

So which seems like that well, somehow the expectations that consumers had was better anchored and the final outcome one year later than the experts. And since then, it seems like it was a little bit of catch up for the experts to catch up to what the consumers are saying.

So in some sense, even though we timed it to be released, the data is collected after the professional uh survey is announced, but it seems like most of the time it goes the other way around and the and the forecasters. In this case, the survey forecasters tend to follow in some cases what the consumers are thinking.

So in some sense, even though we timed it to be released, the data is collected after the professional uh survey is announced, but it seems like most of the time it goes the other way around and the and the forecasters. In this case, the survey forecasters tend to follow in some cases what the consumers are thinking.

But obviously, of late when you have uh several rounds of monetary tightening. In this case, you know, uh increase of the slope of the Singapore dollar exchange rate based policy. You you saw that there is a sort of decline in expectations of professional

But obviously, of late when you have uh several rounds of monetary tightening. In this case, you know, uh increase of the slope of the Singapore dollar exchange rate based policy. You you saw that there is a sort of decline in expectations of professional

forecasters quite significantly. This is in line with what is going on in the US as we have seen even a recent data that was released a couple of days back that uh that New York survey is saying that the numbers are coming down to closer to 3% going for the long term, longer term forward guise of 2%. But

forecasters quite significantly. This is in line with what is going on in the US as we have seen even a recent data that was released a couple of days back that uh that New York survey is saying that the numbers are coming down to closer to 3% going for the long term, longer term forward guise of 2%. But

besides those sort of main anchors, we find that uh you know, individual respondents seems to be fairly stable, but professional forecasters seems to be going uh moving closer to them rather than the other way around that individual respondents are going towards professional forecasters announcements

besides those sort of main anchors, we find that uh you know, individual respondents seems to be fairly stable, but professional forecasters seems to be going uh moving closer to them rather than the other way around that individual respondents are going towards professional forecasters announcements

or even though OK, at sometimes professional analysts may do better than the average public. And sometimes as you said, the average public's expectations seem to be leading them. Putting that aside just the nature of inflation expectation. Is it largely adaptive? And to those of our audience who don't know many of that word in the context of economics, is it really that my expectations are basically uh based on what has been going on in the last 12 months.

or even though OK, at sometimes professional analysts may do better than the average public. And sometimes as you said, the average public's expectations seem to be leading them. Putting that aside just the nature of inflation expectation. Is it largely adaptive? And to those of our audience who don't know many of that word in the context of economics, is it really that my expectations are basically uh based on what has been going on in the last 12 months.

Well, the the challenge is the way some of the data is collected, we have to be cognizant of that. So a lot of data that we collect is from consumers information, many of their information is based on their own past experience. So despite of the fact that we try to sort of I I would uh lack of a better term, educate them about the current data. Uh They might still follow their own instincts more than what policymakers are, are are saying

Well, the the challenge is the way some of the data is collected, we have to be cognizant of that. So a lot of data that we collect is from consumers information, many of their information is based on their own past experience. So despite of the fact that we try to sort of I I would uh lack of a better term, educate them about the current data. Uh They might still follow their own instincts more than what policymakers are, are are saying

or the forward guidance which I mentioned is is given. So in a way, I think there is some levels of adaptive in the if there are significant impact. Like for example, with a tightening of monetary policy, there was expectation, the prices are not going to be unhinged because uh the Singapore Central Bank, in this case, the monetary authority will take enough measures to try to curb this uh you know, uh exchange rate based policy so that the prices don't,

or the forward guidance which I mentioned is is given. So in a way, I think there is some levels of adaptive in the if there are significant impact. Like for example, with a tightening of monetary policy, there was expectation, the prices are not going to be unhinged because uh the Singapore Central Bank, in this case, the monetary authority will take enough measures to try to curb this uh you know, uh exchange rate based policy so that the prices don't,

don't go ahead and become unhinged to some extent. So indeed, that part I think sometimes is reflected that people do react to those information, particularly we see in announcement of macro prudential measures like policies on real estate prices. So there is significant decline in their expectations about whether prices are going to go up or not based on the policies that are announced. But there the the reaction for inflation expectations

don't go ahead and become unhinged to some extent. So indeed, that part I think sometimes is reflected that people do react to those information, particularly we see in announcement of macro prudential measures like policies on real estate prices. So there is significant decline in their expectations about whether prices are going to go up or not based on the policies that are announced. But there the the reaction for inflation expectations

is not as responsive. Maybe part of the reason is the frequency of, of the, of the announcement that comes from the central bank as well. Uh This, there is only semi annual uh policy statements that are made. Uh And, and so there might not be enough anchors that are out there for individual respondents to react to that. So I think they are basing it mostly on their own experience more than what the policy announcements are,

is not as responsive. Maybe part of the reason is the frequency of, of the, of the announcement that comes from the central bank as well. Uh This, there is only semi annual uh policy statements that are made. Uh And, and so there might not be enough anchors that are out there for individual respondents to react to that. So I think they are basing it mostly on their own experience more than what the policy announcements are,

which is fair. I mean, I I would not expect the average person to spend too much time thinking about uh Montreal situational, but to your point earlier that the long term inflation expectations certainly are a function of both expectations that the central bank is serious about dealing with it and which may or may not reflect, reflect past performances. But in a way implicitly, it does um

which is fair. I mean, I I would not expect the average person to spend too much time thinking about uh Montreal situational, but to your point earlier that the long term inflation expectations certainly are a function of both expectations that the central bank is serious about dealing with it and which may or may not reflect, reflect past performances. But in a way implicitly, it does um

ma S monetary policy, uh do you see it being substantially cognizant of inflation expectations or is it also uh looking at sort of past developments and professional forecasts and trying to do the best out of

ma S monetary policy, uh do you see it being substantially cognizant of inflation expectations or is it also uh looking at sort of past developments and professional forecasts and trying to do the best out of

that?

that?

Yeah, so I think in the in the current state of uh the the of course, as I mentioned, the monetary policy which is based on exchange rate as well as looking at a trade weighted basket of currencies for the, which is essentially the Singapore dollar uh nominal effective exchange rate. Now, when you are

Yeah, so I think in the in the current state of uh the the of course, as I mentioned, the monetary policy which is based on exchange rate as well as looking at a trade weighted basket of currencies for the, which is essentially the Singapore dollar uh nominal effective exchange rate. Now, when you are

looking at a policy which is exchange rate based there, uh and there is no other alternative uh options of looking at what the true value, the signal of the inflation expectations from the market, then they have to base it on survey based measures. So the two survey based measures they are looking at is of course the survey of

looking at a policy which is exchange rate based there, uh and there is no other alternative uh options of looking at what the true value, the signal of the inflation expectations from the market, then they have to base it on survey based measures. So the two survey based measures they are looking at is of course the survey of

professional forecasters. But as I mentioned, that that might be very closely linked to the signals coming from MA S directly. So they might be looking at their own policy impact in the professional forecasters announcement. But this particular survey, which is the Synd, you know, D Bs Skbis index survey gives a fresh piece of evidence.

professional forecasters. But as I mentioned, that that might be very closely linked to the signals coming from MA S directly. So they might be looking at their own policy impact in the professional forecasters announcement. But this particular survey, which is the Synd, you know, D Bs Skbis index survey gives a fresh piece of evidence.

So that might be tempering some parts of their policy. Like for example, if they think tightening could wait for a little while longer that there are, you know, so more or less not that much fluctuation in official expectations, they might be able to decide on that based on the numbers from the

So that might be tempering some parts of their policy. Like for example, if they think tightening could wait for a little while longer that there are, you know, so more or less not that much fluctuation in official expectations, they might be able to decide on that based on the numbers from the

expectations that we see uh from, from the survey as well. So given there is no market based measures as, as such, I think these are the main uh sources of signals that the monetary authority actually is getting to make their, make their judgment and decisions as well.

expectations that we see uh from, from the survey as well. So given there is no market based measures as, as such, I think these are the main uh sources of signals that the monetary authority actually is getting to make their, make their judgment and decisions as well.

Is there a um distinction between analyzing inflation expectations, which is what we've been talking about and analyzing cost of living something that I think you have been working on quite a bit lately?

Is there a um distinction between analyzing inflation expectations, which is what we've been talking about and analyzing cost of living something that I think you have been working on quite a bit lately?

Yes, absolutely. And this is sort of uh one of the challenges that uh is not uniquely Singapore but, but because most of, of the data on cost of living as, as well as inflation is collected from urban centers and Singapore of course, is an urban center as well as a city state. The two together means that the the impact of, of of changes of inflation or will have an impact on cost of living.

Yes, absolutely. And this is sort of uh one of the challenges that uh is not uniquely Singapore but, but because most of, of the data on cost of living as, as well as inflation is collected from urban centers and Singapore of course, is an urban center as well as a city state. The two together means that the the impact of, of of changes of inflation or will have an impact on cost of living.

But what we found out in the research that, that we did together with a couple of my ex students and uh and currently uh you know, colleagues at IMF uh as well. Uh Miss Cathy Johan, on this particular aspect of what uh what exactly is cost of living in some sense and uh how is it related to inflation and inflation expectations? We found out something quite interesting that if we try to replicate a more I would say

But what we found out in the research that, that we did together with a couple of my ex students and uh and currently uh you know, colleagues at IMF uh as well. Uh Miss Cathy Johan, on this particular aspect of what uh what exactly is cost of living in some sense and uh how is it related to inflation and inflation expectations? We found out something quite interesting that if we try to replicate a more I would say

well known cost of living index, which is from the Economic Intelligence unit, World cost of Living index or W call, which is the purpose of that is to see how uh professionals can be moved. Executives can be moved from different cities of the world around 100 and 40 odd cities that are covered and see whether what will be the impact on, on that particular move. So they look at cost of living from that particular perspective. So they look at around over 100 different

well known cost of living index, which is from the Economic Intelligence unit, World cost of Living index or W call, which is the purpose of that is to see how uh professionals can be moved. Executives can be moved from different cities of the world around 100 and 40 odd cities that are covered and see whether what will be the impact on, on that particular move. So they look at cost of living from that particular perspective. So they look at around over 100 different

uh sample prices of different, you know, standard baskets that they have looked at across the world and they use that to measure that which city might be kind of declared the most expensive city to live in. But typically it's for most expensive city for expats to move in. So that's sort of their main purpose. So what we did was we used that data and then we recreated something similar to uh the the consumer price index, you know, kind of close the

uh sample prices of different, you know, standard baskets that they have looked at across the world and they use that to measure that which city might be kind of declared the most expensive city to live in. But typically it's for most expensive city for expats to move in. So that's sort of their main purpose. So what we did was we used that data and then we recreated something similar to uh the the consumer price index, you know, kind of close the

it. And we found something quite uh quite fascinating is that even when inflation was near zero or negative, as I mentioned during the pandemic times a little before as well, inflation actually went a little negative as well. The quarter inflation, we found out that the cost of living actually was going up even in that scenario. And this is quite uh quite unique and peculiar if you can think of it that mostly the origin of inflation was to measure cost of living

it. And we found something quite uh quite fascinating is that even when inflation was near zero or negative, as I mentioned during the pandemic times a little before as well, inflation actually went a little negative as well. The quarter inflation, we found out that the cost of living actually was going up even in that scenario. And this is quite uh quite unique and peculiar if you can think of it that mostly the origin of inflation was to measure cost of living

but to for comparability, you know, if you think of comparing apples with apples, they have to fix a basket so that we can compare two different points of time. That's what CP I is compared to the base period, how much is is a particular basket of goods and services? How expensive or how dear would it be at that particular point? So they're keeping the basket same and finding the price differential between them. But there's another way of looking at it. It's looking at the standard of living. Same and find out how much more you're going to spend under certain budget constraints.

but to for comparability, you know, if you think of comparing apples with apples, they have to fix a basket so that we can compare two different points of time. That's what CP I is compared to the base period, how much is is a particular basket of goods and services? How expensive or how dear would it be at that particular point? So they're keeping the basket same and finding the price differential between them. But there's another way of looking at it. It's looking at the standard of living. Same and find out how much more you're going to spend under certain budget constraints.

So the second one is the cost of living measure. The first one is more than inflation measure. So standard of living being same, how much more you spend becomes actually a measure, a de facto measure of uh of of cost of living. So we looked at that and we found out that indeed that even when there is a flat inflation rate with a fixed basket, people are adaptively choosing a basket that might cost more, which means that to keep maybe the standard of living about

So the second one is the cost of living measure. The first one is more than inflation measure. So standard of living being same, how much more you spend becomes actually a measure, a de facto measure of uh of of cost of living. So we looked at that and we found out that indeed that even when there is a flat inflation rate with a fixed basket, people are adaptively choosing a basket that might cost more, which means that to keep maybe the standard of living about

the same or maybe there is some aspirational impact as well. So people want a better standard of living and that is pro possibly what is causing the cost of living to increase even when inflation is flat. Now, that differential is something that actually central banks and policy makers should be aware of that even when inflation is flat, it might seem like cost of living is actually going up. So part of it is probably aspirational but part of it is generated from the inflation and the similar basket that we talked about before. Now,

the same or maybe there is some aspirational impact as well. So people want a better standard of living and that is pro possibly what is causing the cost of living to increase even when inflation is flat. Now, that differential is something that actually central banks and policy makers should be aware of that even when inflation is flat, it might seem like cost of living is actually going up. So part of it is probably aspirational but part of it is generated from the inflation and the similar basket that we talked about before. Now,

what exactly uh can we infer from that that in, in a in a city state where everything is being imported? There is the transmission can happen through cost of living through pass through cost as well as this aspirational cost. When you

what exactly uh can we infer from that that in, in a in a city state where everything is being imported? There is the transmission can happen through cost of living through pass through cost as well as this aspirational cost. When you

see people around you having sort of a better standard of living as well. So there are these endogenous choices which might actually make this cost of living impact. Uh I would say, I would say far worse than, than what you see, just the inflation impact. So if inflation technically is something like 3% or 4% your cost of living increase might be about 7 8%

see people around you having sort of a better standard of living as well. So there are these endogenous choices which might actually make this cost of living impact. Uh I would say, I would say far worse than, than what you see, just the inflation impact. So if inflation technically is something like 3% or 4% your cost of living increase might be about 7 8%

right? Or I have a couple of thoughts on this issue. So for example, in the context of the US, we see cost of living across states very substantially. So you argue that in the US over the last one year, inflation has come down substantially. But still people from California are moving to Texas because of tax differential, home price differential. And so then the level is also an important

right? Or I have a couple of thoughts on this issue. So for example, in the context of the US, we see cost of living across states very substantially. So you argue that in the US over the last one year, inflation has come down substantially. But still people from California are moving to Texas because of tax differential, home price differential. And so then the level is also an important

consideration on on relative scale that you know is my neighboring country or neighboring state, offering me a lower cost for all those basket of goods that I consume. Assuming of course, you know, my income remains same if taxes were to play another role, then of course, a net of income tax becomes an important consideration as well. So, so that's one thing I mean, I I feel that you know, sitting here in Singapore, we always talk about Hong Kong that the cost of living in Hong Kong traditionally has been much higher than Singapore.

consideration on on relative scale that you know is my neighboring country or neighboring state, offering me a lower cost for all those basket of goods that I consume. Assuming of course, you know, my income remains same if taxes were to play another role, then of course, a net of income tax becomes an important consideration as well. So, so that's one thing I mean, I I feel that you know, sitting here in Singapore, we always talk about Hong Kong that the cost of living in Hong Kong traditionally has been much higher than Singapore.

It seems like the tables have turned and the cost of living there is actually lower than Singapore.

It seems like the tables have turned and the cost of living there is actually lower than Singapore.

Uh The second one is this level versus difference issue that you also alluded to, that you could have times when inflation, the rate of inflation is low or coming down. But that doesn't mean that the level of prices have come down. You need this inflation uh deflation for, for, you know, the level to come down. It's like, you know, Singapore's property prices, it may be flat on a year on year basis, but it is up like 25% over the last two years. Um So when you start thinking about

Uh The second one is this level versus difference issue that you also alluded to, that you could have times when inflation, the rate of inflation is low or coming down. But that doesn't mean that the level of prices have come down. You need this inflation uh deflation for, for, you know, the level to come down. It's like, you know, Singapore's property prices, it may be flat on a year on year basis, but it is up like 25% over the last two years. Um So when you start thinking about

the cost of living, not of expats, not of people who are looking Singapore versus Hong Kong, but look, but looking at just living in Singapore day to day basis uh and where we know that, you know, wage growth is moderate, you don't have some of the situation we have in some other countries where wage growth is very strong. So then do you get the feeling looking at your surveys and looking at your analysis of cost of living that Singaporeans affordability is actually getting pushed back that it's not expanding?

the cost of living, not of expats, not of people who are looking Singapore versus Hong Kong, but look, but looking at just living in Singapore day to day basis uh and where we know that, you know, wage growth is moderate, you don't have some of the situation we have in some other countries where wage growth is very strong. So then do you get the feeling looking at your surveys and looking at your analysis of cost of living that Singaporeans affordability is actually getting pushed back that it's not expanding?

Yeah, I mean, this is definitely a AAA pretty deep problem in a multiple fronts. So I'll explain the difference between Hong Kong and Singapore. And as you rightly mentioned that maybe if, if you look at the the cost of living element of it, there is a challenge on how how house prices uh accommodation plays a very important role in the cost of living as well is actually seeping into the cost of living framework. And that's one of the things that is causing the cost of living to go up. But there is another aspect to it. I mean, you can endogenously

Yeah, I mean, this is definitely a AAA pretty deep problem in a multiple fronts. So I'll explain the difference between Hong Kong and Singapore. And as you rightly mentioned that maybe if, if you look at the the cost of living element of it, there is a challenge on how how house prices uh accommodation plays a very important role in the cost of living as well is actually seeping into the cost of living framework. And that's one of the things that is causing the cost of living to go up. But there is another aspect to it. I mean, you can endogenously

choose, uh, you know, some certain baskets that will fit your standard of living. Uh, so you might be able to sort of do some kind of a tradeoff between two baskets. But having said that, I think there is another channel that we are, we are sort of ignoring which is the wage rate and the price relationship. So when you have wages go up for a variety of reasons, could be policy reasons as well. So when wages go up, there will be some impact on the prices as well.

choose, uh, you know, some certain baskets that will fit your standard of living. Uh, so you might be able to sort of do some kind of a tradeoff between two baskets. But having said that, I think there is another channel that we are, we are sort of ignoring which is the wage rate and the price relationship. So when you have wages go up for a variety of reasons, could be policy reasons as well. So when wages go up, there will be some impact on the prices as well.

So the question is that is wage going up relative to the prices or not, that might also influence how movement can occur from one country to another. I mean, you are also looking at prospects of what is the possibility of the growth. So if there is, uh there is significant movement of say talent coming from one part to another, you would see there will be an impact on housing prices as well

So the question is that is wage going up relative to the prices or not, that might also influence how movement can occur from one country to another. I mean, you are also looking at prospects of what is the possibility of the growth. So if there is, uh there is significant movement of say talent coming from one part to another, you would see there will be an impact on housing prices as well

and that house price together with the higher wages might have an adverse impact. So you have to have policy which is sort of adaptive to such changes as well. So it's kind of very difficult to I would say isolate different standards of living because there will be these sort of feedback loops between them, but at least be cognizant of that. And that might help to uh to kind of lower prices which is so having stick in it

and that house price together with the higher wages might have an adverse impact. So you have to have policy which is sort of adaptive to such changes as well. So it's kind of very difficult to I would say isolate different standards of living because there will be these sort of feedback loops between them, but at least be cognizant of that. And that might help to uh to kind of lower prices which is so having stick in it

in, in in, I would say accommodation costs in some cases might also be a contributory factor to this increase in in cost of living because the rental has to be often passed through to prices. So the question now is that compared to Hong Kong are rentals in say Singapore are increasing at a lower rate or increasing at the same rate. I mean, as you mentioned already and and correctly, so

in, in in, I would say accommodation costs in some cases might also be a contributory factor to this increase in in cost of living because the rental has to be often passed through to prices. So the question now is that compared to Hong Kong are rentals in say Singapore are increasing at a lower rate or increasing at the same rate. I mean, as you mentioned already and and correctly, so

that when the level is higher and that it doesn't seem like prices are going down. So a lot of properties are held in this case, say commercial properties are held which is in shopping malls which are sort of shut down or closed rather than lowering the price. We know that if there's excess supply, the prices should follow suit. But rather than that, if there are portions which are not available in the market, hoping for the market to recover that impact will actually go back to the prices as well.

that when the level is higher and that it doesn't seem like prices are going down. So a lot of properties are held in this case, say commercial properties are held which is in shopping malls which are sort of shut down or closed rather than lowering the price. We know that if there's excess supply, the prices should follow suit. But rather than that, if there are portions which are not available in the market, hoping for the market to recover that impact will actually go back to the prices as well.

Absolutely. So we are fully cognizant that

Absolutely. So we are fully cognizant that

and just like any other part of the world, there are parts of Singapore where rents are high and there are parts of Singapore where rents are not very high and the places where rents are high. The expats are competing against each other to rent these places,

and just like any other part of the world, there are parts of Singapore where rents are high and there are parts of Singapore where rents are not very high and the places where rents are high. The expats are competing against each other to rent these places,

places where rents are not very high, largely local population is living. But that's the um rental argument. Do you have any insights uh from your, you know, studies to tell us beyond rent, if there's heterogeneity or prices in Singapore? I mean, if I go to a grocery store, is it the same in the northern part of Singapore or is the eastern part of Singapore and western part of Singapore?

places where rents are not very high, largely local population is living. But that's the um rental argument. Do you have any insights uh from your, you know, studies to tell us beyond rent, if there's heterogeneity or prices in Singapore? I mean, if I go to a grocery store, is it the same in the northern part of Singapore or is the eastern part of Singapore and western part of Singapore?

Uh This is a fascinating thing because you know, Singapore is such a small place. You expect that prices will, you know, adaptively change. Yeah. So it will, it will not exist because all you have to do is like 10 minutes drive away or 10 minutes bus ride or between right away, you would be able to buy at a cheaper rate and particularly with the pandemic, you would expect there will be a more, you know, equalization if I may say so of prices. But it turns out that is not entirely true.

Uh This is a fascinating thing because you know, Singapore is such a small place. You expect that prices will, you know, adaptively change. Yeah. So it will, it will not exist because all you have to do is like 10 minutes drive away or 10 minutes bus ride or between right away, you would be able to buy at a cheaper rate and particularly with the pandemic, you would expect there will be a more, you know, equalization if I may say so of prices. But it turns out that is not entirely true.

So indeed, we probably are sort of uh slaves of habit to some extent that we tend to shop in the same place rather than shop around, which I think would be a better thing to do to figure out what is the best price, whether we can actually order online. Now, ordering online also have a cost implication, right? So if the transport cost goes up or the quantity that is being delivered have certain features in it. You might indirectly because of the bundling

So indeed, we probably are sort of uh slaves of habit to some extent that we tend to shop in the same place rather than shop around, which I think would be a better thing to do to figure out what is the best price, whether we can actually order online. Now, ordering online also have a cost implication, right? So if the transport cost goes up or the quantity that is being delivered have certain features in it. You might indirectly because of the bundling

might be exposed to a higher cost rather than buying something at the point that you need it. So all of these things put together, it turns out that indeed that you would be able to get a lower price in certain parts of Singapore compared to other probably because of the discounts that you get. So the stated prices might be the same. So when you look at just the quoted price from online, uh online platforms might be the same. But at the same time, you might,

might be exposed to a higher cost rather than buying something at the point that you need it. So all of these things put together, it turns out that indeed that you would be able to get a lower price in certain parts of Singapore compared to other probably because of the discounts that you get. So the stated prices might be the same. So when you look at just the quoted price from online, uh online platforms might be the same. But at the same time, you might,

I might be able to shop around and see there are better discounts that are available. So we don't have the data on the transacted price. So if you have the data on the transacted price, rather the coded price, then we might have a better sense of how much different different parts of Singapore are. Obviously property prices are very different across different prices. Uh Parts of Singapore rental is different, so you can expect that that pass through will also be different in different parts of Singapore as well,

I might be able to shop around and see there are better discounts that are available. So we don't have the data on the transacted price. So if you have the data on the transacted price, rather the coded price, then we might have a better sense of how much different different parts of Singapore are. Obviously property prices are very different across different prices. Uh Parts of Singapore rental is different, so you can expect that that pass through will also be different in different parts of Singapore as well,

right? Um So we've largely talked about data observations from the data. So far, I want to talk a little bit about policy. What in your view is the best way of dealing with the cost of living increases in an open economy like Singapore. And I I underscore the point it is not just a Singapore specific problem. I mean, I just came back from the UK where

right? Um So we've largely talked about data observations from the data. So far, I want to talk a little bit about policy. What in your view is the best way of dealing with the cost of living increases in an open economy like Singapore. And I I underscore the point it is not just a Singapore specific problem. I mean, I just came back from the UK where

utility bills are up three times from. They were before the war in Ukraine. And the high cost of gas and electricity have added to a significant amount of concerns around the cost of living. So it's a worldwide phenomenon, but you know, we're living in Singapore, we want to know about Singapore. What in your view is the best way to deal with the cost of living here?

utility bills are up three times from. They were before the war in Ukraine. And the high cost of gas and electricity have added to a significant amount of concerns around the cost of living. So it's a worldwide phenomenon, but you know, we're living in Singapore, we want to know about Singapore. What in your view is the best way to deal with the cost of living here?

So let me, let me mention about Singapore, as you mentioned, you know, UK might be facing other challenges from uh because maybe because of Brexit and other things as well, you know. Uh but in Singapore, our main challenge is being a small open economy. We actually have a double whammy every time there is an increase in say oil prices or commodity prices. So the oil price increase together with us, maybe a speculative increase of us dollar rate uh creates a double whammy. First of all, you have to pay more for oil, which has sort of a

So let me, let me mention about Singapore, as you mentioned, you know, UK might be facing other challenges from uh because maybe because of Brexit and other things as well, you know. Uh but in Singapore, our main challenge is being a small open economy. We actually have a double whammy every time there is an increase in say oil prices or commodity prices. So the oil price increase together with us, maybe a speculative increase of us dollar rate uh creates a double whammy. First of all, you have to pay more for oil, which has sort of a

uh uh an uh an impact across the board. And then of course, you have to pay up in us dollar which might become also more expensive compared to Singapore dollar. So, uh so I think the, the, the main challenge for policymakers in Singapore is that they have to really do catch up on the tightening of the monetary policy. I think from my vantage point on looking at the data uh and given, you know, how, how the exchange rate policy in Singapore works, I think we would probably have a better communication

uh uh an uh an impact across the board. And then of course, you have to pay up in us dollar which might become also more expensive compared to Singapore dollar. So, uh so I think the, the, the main challenge for policymakers in Singapore is that they have to really do catch up on the tightening of the monetary policy. I think from my vantage point on looking at the data uh and given, you know, how, how the exchange rate policy in Singapore works, I think we would probably have a better communication

of what the policy stance of the government is. You know, in a, in a more I would say digestible way might be better for people to understand that whether to spend now or later. And that part like for example, are their supply restrictions on certain elements that we would have a higher price on something. So they expect how to manage their future cost implication. And that might be one of the ways that you put the problem back to consumers to decide exactly what to buy. And when

of what the policy stance of the government is. You know, in a, in a more I would say digestible way might be better for people to understand that whether to spend now or later. And that part like for example, are their supply restrictions on certain elements that we would have a higher price on something. So they expect how to manage their future cost implication. And that might be one of the ways that you put the problem back to consumers to decide exactly what to buy. And when

at least from that particular point of view. And then the other thing, of course, as I mentioned is that maybe some levels of uh you know,

at least from that particular point of view. And then the other thing, of course, as I mentioned is that maybe some levels of uh you know,

relaxation on the, the the other aspect of increase in costs, which is a tighter labor market might also be uh meaningful because, you know, a lot of Singaporeans eat out. And because of that, the impact of a tight labor market having impacted on FNB sector is also passing through their costs. So that is sort of one of the things that they cannot really uh you know, adjust it as much. And finally, I would say

relaxation on the, the the other aspect of increase in costs, which is a tighter labor market might also be uh meaningful because, you know, a lot of Singaporeans eat out. And because of that, the impact of a tight labor market having impacted on FNB sector is also passing through their costs. So that is sort of one of the things that they cannot really uh you know, adjust it as much. And finally, I would say

that, you know, I wouldn't say deregulation per se. But a more competitive rental market for commercial property is probably a better option going forward because that also, so I'm looking at pass through being one of the things that at least to some extent the policies can address. It's not really a monetary policy per se because uh to some extent monetary policy cannot help in pass through, it has to be done in Singa

that, you know, I wouldn't say deregulation per se. But a more competitive rental market for commercial property is probably a better option going forward because that also, so I'm looking at pass through being one of the things that at least to some extent the policies can address. It's not really a monetary policy per se because uh to some extent monetary policy cannot help in pass through, it has to be done in Singa

per dollar, right? It's not paid in US dollar in India, any other currency. So, so somehow policy will have zero impact monetary policy, exchange rate policy will have zero if not, you know, maybe have very little impact on these past through costs. So addressing the pastor costs and communications are, I think the two best way of at least going through this current phase of possible spike or you know, short term spike in prices.

per dollar, right? It's not paid in US dollar in India, any other currency. So, so somehow policy will have zero impact monetary policy, exchange rate policy will have zero if not, you know, maybe have very little impact on these past through costs. So addressing the pastor costs and communications are, I think the two best way of at least going through this current phase of possible spike or you know, short term spike in prices.

Well, Armindo, we are recording this on the afternoon on the 15th of August and let me read you the latest headline from the Straits Times online housekeepers, porters added to a list of jobs open to work permit holders from more locations. So to your point of, you know, liberalizing the labor market, the services side. Um the authorities have heard you and they're trying to take some measures in that direction. Uh No, I fully agree with you but a couple of interesting policy dilemma come in. We want a greener city, we want a city that is

Well, Armindo, we are recording this on the afternoon on the 15th of August and let me read you the latest headline from the Straits Times online housekeepers, porters added to a list of jobs open to work permit holders from more locations. So to your point of, you know, liberalizing the labor market, the services side. Um the authorities have heard you and they're trying to take some measures in that direction. Uh No, I fully agree with you but a couple of interesting policy dilemma come in. We want a greener city, we want a city that is

not congested with cars and therefore Singapore has a rather, you know, unique, you know, solution for the world in terms of, you know, certificate of eligibility for cars, people compete to get the right to have their cars on the roads of Singapore and price of that has skyrocketed. But you could also argue it should skyrocket because we want less people to own cars in a country where there is first class transportation infrastructure and tens of billions of dollars are being spent to actually enhance that transportation infrastructure. So

not congested with cars and therefore Singapore has a rather, you know, unique, you know, solution for the world in terms of, you know, certificate of eligibility for cars, people compete to get the right to have their cars on the roads of Singapore and price of that has skyrocketed. But you could also argue it should skyrocket because we want less people to own cars in a country where there is first class transportation infrastructure and tens of billions of dollars are being spent to actually enhance that transportation infrastructure. So

that substi ability that should I drive a car versus should I take the M RT? Sometimes, I guess when there is a lot of desire and aspiration to drive the car, we will say cost of living is high.

that substi ability that should I drive a car versus should I take the M RT? Sometimes, I guess when there is a lot of desire and aspiration to drive the car, we will say cost of living is high.

But if people choose to drive M RT will say cost of living is slow. How do you square that? Yeah,

But if people choose to drive M RT will say cost of living is slow. How do you square that? Yeah,

that's exactly the point, right. So this inherent aspirational aspect of it has an impact that goes directly to our pocketbook. But then again, I mean, you shouldn't say that you should not drive a car because if car is your access to a particular social circle, then that might be causing it. But there is another aspect to it as well. The the certificate of entitlement going up, you know,

that's exactly the point, right. So this inherent aspirational aspect of it has an impact that goes directly to our pocketbook. But then again, I mean, you shouldn't say that you should not drive a car because if car is your access to a particular social circle, then that might be causing it. But there is another aspect to it as well. The the certificate of entitlement going up, you know,

because of pro possibly limited supply as well as a much higher demand from, you know, people moving into Singapore might have other unintended consequence. So I will give one example first, you might be able to sort of justify through the, you know, more sustainability moves as well that you don't want as many cars in Singapore. But then again, commercial cars, you know, the ones which are carrying goods and services around also have a higher

because of pro possibly limited supply as well as a much higher demand from, you know, people moving into Singapore might have other unintended consequence. So I will give one example first, you might be able to sort of justify through the, you know, more sustainability moves as well that you don't want as many cars in Singapore. But then again, commercial cars, you know, the ones which are carrying goods and services around also have a higher

cost to pay for the certificates. If you look at, uh, the, the, the, the, you know, the shared, uh, you know, uh, car sharing and other, uh, uh drivers which are, which are, uh, you know, grab and other, uh other facilities that are available. One of the challenges for that is that they might also be the one who are bidding for the coe. So which means that you are automatically increasing.

cost to pay for the certificates. If you look at, uh, the, the, the, the, you know, the shared, uh, you know, uh, car sharing and other, uh, uh drivers which are, which are, uh, you know, grab and other, uh other facilities that are available. One of the challenges for that is that they might also be the one who are bidding for the coe. So which means that you are automatically increasing.

So, because maybe more people are going into the gig work space and they are using that, well, let's buy a car and then use it to, to earn sort of a, a secondary income that might also be having an impact. So I think maybe once, which are right, sharing cars might be put in a slightly different category than coes because uh or different form, I mean, I'm not going to go ahead and create more coes for that matter, but I think uh

So, because maybe more people are going into the gig work space and they are using that, well, let's buy a car and then use it to, to earn sort of a, a secondary income that might also be having an impact. So I think maybe once, which are right, sharing cars might be put in a slightly different category than coes because uh or different form, I mean, I'm not going to go ahead and create more coes for that matter, but I think uh

they should be cognizant of that as well because this might be causing this change. So there is one is earning a uh you know, earning a living which should be encouraged. But the other one is possibly more conspicuous consumption, conspicuous consumption can be taxed more, but earning a living, it is taxed more then that has other impacts on the society as well.

they should be cognizant of that as well because this might be causing this change. So there is one is earning a uh you know, earning a living which should be encouraged. But the other one is possibly more conspicuous consumption, conspicuous consumption can be taxed more, but earning a living, it is taxed more then that has other impacts on the society as well.

Fair enough for the longest time, I have felt that, you know, there should be a, a regulation related to the number of cars a household can have or the number of cars the household can have under certain COV regime. So the first car at a reasonable rate and the second and the third car progressively more steep. But I also realized that these things are easy for me to say, sitting in the armchair. Uh It's not that easy to implement, you know, what is a nuclear family and how many cars

Fair enough for the longest time, I have felt that, you know, there should be a, a regulation related to the number of cars a household can have or the number of cars the household can have under certain COV regime. So the first car at a reasonable rate and the second and the third car progressively more steep. But I also realized that these things are easy for me to say, sitting in the armchair. Uh It's not that easy to implement, you know, what is a nuclear family and how many cars

to the nuclear family need. Can the authorities decide on that on behalf of families or not? Uh Maybe not that straightforward, although it seems to me that might be a reasonable solution. Uh Let me come back to this uh study as you have pointed out earlier that, you know, this has been going on for more than a decade. You have uh four dozen rounds of survey. Uh Have you modified the study? And do you have plans to refine it further?