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Professor Paul Krugman (left) and Professor Jun Yu (Director, Sim Kee Boon Institute for Financial Economics) during the Question & Answer Session.

On US election day, Professor Paul Krugman admitted that the imminent announcement of the election result might be a slight distraction for everyone, himself included, when he spoke at SMU’s Mochtar Riady Auditorium on 7 October. However, the audience gave their full attention to his engaging delivery of the lecture entitled “Global Economic Outlook – Preventing the next crisis”, and Prof Krugman offered some timely economic advice for whoever won the election.

Professor Krugman received the Nobel Prize in Economic Sciences in 2008 for his analysis of trade patterns and location of economic activity in the fields of international and regional economics. He is also professor of economics at Princeton University, a regular Op-Ed columnist for The New York Times, was awarded the American Economic Association’s John Bates Clark medal for his work on international trade and is the author of more than twenty books.

After a stimulating hour, which was full of challenging ideas and opinions, Professor Jun Yu, Director of the Sim Kee Boon Institute for Financial Economics (SKBI), invited questions from the audience and the viewers who had been watching the webcast. There were queues at the microphones in the auditorium and a long list of additional questions were sent in my phone text messaging. Professor Krugman gave insightful answers to several searching questions, until he was beaten by the clock when the allocated time was up.

The lecture was organised by the Sim Kee Boon Institute for Financial Economics (SKBI) which seeks to pioneer and promote the study of financial economics and financial econometrics in areas of strategic relevance to Singapore's economy and the economies of the region.

Singaporeans expect inflation to ease for the next 12 months due to the global economic slowdown and weak demand. The SKBI-MasterCard Singapore Index of Inflation Expectations report conducted by the Sim Kee Boon Institute for Financial Economics (SKBI) at SMU and MasterCard shows that consumers expect headline inflation of 4.37 per cent this year. This was lower than the earlier expectation of 4.57 per cent when a similar survey was conducted in September. SKBI Programme Director Aurobindo Ghosh said: “Even though the United States possibly avoided falling off the fiscal cliff, many Eurozone economies are tittering on the brink of continued slowdown in productive activities and persistently high unemployment. This has created a downward pressure on global demand which in turn has manifested in low inflation rates in many Western and regional economies. In the medium term, despite the turmoil in the global economy, the SInDEx survey results have shown how grounded Singapore households are, so much so that even the professional forecasters with access to data and relevant market knowledge find it hard to beat their expectations.”

Finding solace in a new financial climate

Eugene Say, a second-year student at the SMU Lee Kong Chian School of Business and student trainer in the SMU-Citi Financial Literacy Programme for young adults, shared his thoughts on how the key to finding some comfort and peace in today's financial environment was to adopt the habit of saving, together with a view to incurring less debt. This would be possible only by reinforcing good decision-making skills when it comes to one's finances. He said that the act of saving money is the most fundamental financial discipline everyone should master, regardless of age and financial status. Mr Lee also advocated responsibility in using credit. He urged young Singaporeans to redefine wealth, happiness and success and cited a survey by OCBC Bank to show that, encouragingly, Singaporeans are shifting their focus towards intangibles defined by non-monetary values.

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Programme Director of the SMU Sim Kee Boon Institute for Financial Economics, Dr Aurobindo Ghosh, explained that since growth has come to a halt in many developed countries, including the US and those in the eurozone, modern investors who are looking to protect their wealth choose Singapore as the investment destination in Asia.

Researcher: Making better use of medical data to reduce patient visit frequency

Senior Research Fellow of the Centre for Silver Security (CSS) of the Sim Kee Boon Institute for Financial Economics (SKBI) at SMU and Visiting Professor of Economics, Rhema Vaithianathan suggested that Singapore’s healthcare industry could use medical data better to reduce the frequency of hospital visits for patients. She shared how hospitals in New Zealand and America would use a risk prediction model to reduce the frequency of a patient’s visits. She added that Singapore hospitals could use existing medical data to develop preventive measures, so that elderly patients do not need to be hospitalised. For patients who may have frequented hospitals in the past six months, the hospital could arrange for them to receive treatment at the polyclinic to reduce the number of hospital visits. By arranging for a nurse to take care of such patients, the risk of the patient losing the ability to care for himself is reduced.

Eugene Say, a second-year student at the SMU Lee Kong Chian School of Business and student trainer in the SMU-Citi Financial Literacy Programme for young adults, shared his thoughts on how the key to finding some comfort and peace in today's financial environment was to adopt the habit of saving, together with a view to incurring less debt. This would be possible only by reinforcing good decision-making skills when it comes to one's finances. He said that the act of saving money is the most fundamental financial discipline everyone should master, regardless of age and financial status. Mr Lee also advocated responsibility in using credit. He urged young Singaporeans to redefine wealth, happiness and success and cited a survey by OCBC Bank to show that, encouragingly, Singaporeans are shifting their focus towards intangibles defined by non-monetary values.

Singapore consumers expect inflation to edge down as the global economy weakens, says the latest SKBI-MasterCard Singapore Index of Inflation Expectations report. The report, produced by the Sim Kee Boon Institute for Financial Economics (SKBI) at SMU and sponsored by MasterCard, shows that consumers expect headline inflation of 4.37 per cent this year, down from last September's expectation of 4.57 per cent inflation in the year ahead. This also falls within the official inflation forecast range of 3.5 to 4.5 per cent for 2013. SKBI Programme Director Aurobindo Ghosh and SKBI Director Yu Jun, who developed the index, wrote in their latest report that the index's performance over the past year suggests that inflation expectations in Singapore are quite responsive to policymakers' statements but do not react excessively to short-term fluctuations in food and oil prices.