Home Page of Hoon Hian Teck
Biographical
Publication list via Institutional Knowledge at Singapore Management University [link]
Links to the homepages of my research collaborators:
Authored and Co-authored Books (reverse chronological order)
Dynamism: The Values That Drive Innovation, Job Satisfaction, and Economic Growth by Edmund S. Phelps, Raicho Bojilov, Hian Teck Hoon, and Gylfi Zoega, Cambridge, MA: Harvard University Press, 2020. [link]
Economic Dynamism, Openness, and Inclusion: How Singapore Can Make the Transition from an Era of Catch-up Growth to Life in a Mature Economy by Hian Teck Hoon, Singapore: World Scientific Publishing, 2019. [link]
Trade, Jobs and Wages by Hian Teck Hoon, Northampton, MA: Edward Elgar Publishing, 2000. [link]
Research Projects (both individual and collaborative)
1. Labor Taxes, Wealth, and Hours Worked
A well-known paper, Prescott (2004), makes the argument that the bulk of the long-term decline in hours worked by Europeans (relative to Americans) can be explained by the rise of marginal labor taxes in Europe. This research project shows how wealth adjustment, in the context of a world with international trade in capital and goods, can undo the negative effects of punishingly high labor taxes in one country and lead to an international equalization of hours worked.
2. Overinvestment and Employment
Since the modern economy is one that is fraught with novelty, asset prices can turn out to have travelled along disequilibrium paths where expectations of the future turn out to be wrong. This may be one way to describe a "bubble." When the bubble comes to an end and the economy finds itself with "too much" capital---excess housing stock as well as plant and equipment---what does formal theory predict about economic activity in the post-bubble era? This research aims to answer this basic question.
3. Real Exchange Rates and Employment
A well-known mechanism in the open-economy Mundell-Fleming model under flexible exchange rates and free international capital mobility is that real exchange rate depreciation acts to shift spending towards the domestically produced good and thus expand employment. However, in models with a sufficiently rich supply side and trade frictions, a collapse in local asset prices lead customer-market firms to increase their mark-ups and labor-intensive firms to cut back their hiring with the result that real exchange rate depreciation is accompanied by a slump in employment. This research aims to find theoretical and empirical support for this non-Keynesian channel, particularly in the behavior of economies during and after the 2008-9 credit crisis.
4. Explaining the Big Swings of Economic Activity
When Structural Slumps was written, part of the motivation was to understand how high external real interest rates facing several European economies in the first half of the 1980s could cause an increase in equilibrium unemployment. In retrospect, with data from the 1990s to 2020 added to data in the decades prior to the 1980s, the real interest rate was experiencing a secular decline from the 1970s onwards. One aim of the current work is to study the consequences of the decline in TFP growth for key macroeconomic variables, including the real interest rate.
Presentations
Talk on the topic, “Economic Growth and Social Cohesion.” March 2009. [slides in pdf]
Talk on the topic, “The Global Credit Crunch and the Singapore Economy: Challenges and Opportunities." July 2009. [slides in pdf]
Talk on the topic, “The Importance of Having a Global View for Grasping the Keys and Threats to Economic Prosperity." August 2009. [slides in pdf]
Edited book
Recent Work and Presentations
I contributed a chapter entitled "Social Insurance" in The Singapore Economy: Dynamism and Inclusion. A draft of the chapter is here. [draft]
I was a panellist on the Straits Times-UOB Roundtable on Budget 2021 held on 17 February 2021 [link]
Here is a commentary of mine that appeared in ChannelNewsAsia Online on 20 January 2020 titled "Is low growth the new normal for Singapore?" [link]
I gave the closing remarks at the Singapore Economic Policy Forum 2019 on 24 October 2019 on the theme: External Challenges to the Singapore Economy and Possible Responses. A draft of my remarks is here [link].
I was on a panel in the session on "Taxation and Economic Systems" at the 17th Annual Conference of Columbia University's Center on Capitalism and Society held on 7 October 2019. The theme of the conference is "Progressivism, Socialism, Nationalism: What Room for Innovation and ‘Creative Destruction’? For Economic Justice to the Least Advantaged? For Teaching Youth the Good Life? " Video coverage is available here. [link] A written version of my discussion is available here. [link]
I gave an interview which formed the basis for the following story: "Singapore's Future - Anchoring on the Small for Growth" in The Business Times, 8 February 2017 [link].
I presented a paper titled "Future of the Singapore Economy: What are the Challenges and What to Do About Them?" at the Singapore Economic Policy Forum 2016 on 27 October 2016. A draft of the paper is here [link] while the presentation slides are here. [link] A 28 October 2016 Straits Times news report of the Forum is here. [link]
I was on a panel organized by the Asian Bureau of Finance and Economic Research on 23 May 2016 to discuss the topic "Growth in the Face of Headwinds: What to Do?" A written version of my prepared remarks is here. [link]
I contributed a chapter entitled "Whither Singapore's Unemployment Rate?" in the book Singapore 2065 edited by Euston Quah. A draft of the chapter is here. [link]
I gave two interviews which formed the basis for the following two respective stories: "What Drives the Singapore Economy" in The Business Times, 18 March 2015 [link] and "Keeping the Economy Healthy" in Research@SMU Issue 18 (September 2014) [link].
Here is the transcript of an interview I gave on Singapore's future economic prospects that was published in Singapore 365: A Retrospective on 2013 by Husken-Ulbrich Books. [link]
An op-ed of mine (in Chinese), headlined, "Successful entrepreneurs need to have knowledge and skills in various fields," appeared in Lianhe Zaobao on 18 December 2014. [link] My original draft, in English, that cited the data analysis of Professor Edward Lazear of Stanford Graduate School of Business is here. [link]
Here is a contribution of mine entitled, "Wage Subsidies as a Tool to Fight Recessions," in Volume XIII, Issue 2 October 2014 of Macroeconomic Review published by the Economic Policy Group, Monetary Authority of Singapore. [link]
Here is an op-ed of mine published on 2 July 2014 in The Straits Times titled "Why CPF-style Systems Generally Work Better." [link]
In March 2014, I did a SMU podcast on "A closer look at wages in Singapore." [link]
An opinion piece of mine entitled, "Relook Link Between Low Wages and Foreign Workers," published on 27 November 2013 in The Straits Times. [link] Here are two related helpful charts. [link] Here is a chart on recruitment rate from 2002 to 2012. [link]
I made a presentation on "Structural Shifts, Job Creation, and Wages in Singapore" at the Singapore Economic Policy Forum 2013, held on 25 October 2013 and co-organized by the Economic Society of Singapore and the School of Economics, Singapore Management University. A short paper is here. [link] The presentation slides are here. [link] An earlier paper titled, "Future Job Prospects in Singapore," covered the period 1966-2003. [link]
I was a discussant of three papers in the first session titled, "Decline of the West---Economic Data," at the 11th Annual Conference of Columbia University's Center on Capitalism and Society held on 16 September 2013. The theme of the conference is "Dynamism and Innovation in the West: Has a Decline Set In?" Video coverage is available here. [link] A written version of my discussion is available here. [link]
Work on Wage Subsidy Programs
I had the opportunity to present a paper, titled "Wage Subsidies in a Program for Economic Inclusion and Growth," at a wage subsidies workshop in South Africa organized by the Centre for Development and Enterprise on November 2, 2010. Section 4 of the paper briefly discusses the use of wage subsidies in the Singapore story. [link] A summary of my presentation is found on pages 19 to 22 of the report, Jobs for young people: Is a wage subsidy a good idea? CDE Roundtable Number 17, August 2011. [link]
Here is another paper of mine, dated 3 December 2009, that studies the effects of a jobs credit (or employment subsidy) in a turnover-training model of the labor market. [draft] There is also a link to a video coverage of a short presentation of mine on Singapore's experience with an employment subsidy both as a tool of structural policy (to boost the earnings and employment of low-wage workers) and a temporary anti-recessionary policy (to save jobs) at the 7th Annual Conference on Post-Crisis Economic Policies organized by Columbia University's Center on Capitalism and Society. (The presentation is under Panel 4: Policies Towards Employment and Inclusion.) [link]
Here is a 2007 contribution of mine entitled, "The Singapore Model of Workfare: Three Suggestions." [link]
Links to the Work of Edmund Phelps on Wage Subsidy Programs
For at least a decade and a half, the 2006 Nobel laureate for economics, Professor Edmund Phelps, a teacher of mine at Columbia University and a research collaborator, has written about a wage subsidy (known also as an employment subsidy) program as a means to foster economic inclusion. As Singapore recently announced a Jobs Credit scheme as part of its Resilience Package to counteract the negative fallout from the global credit crunch, there might be some public interest in the links to a portion of his writings on this subject.
Here is a link to an OECD conference paper of his, entitled, "The importance of inclusion and the power of job subsidies to increase it." [link]
Here is a link to his Introduction chapter in Edmund S. Phelps (ed.), 2003, Designing Inclusion: Tools to Raise Low-End Pay and Employment in Private Enterprise, Cambridge: Cambridge University Press. [link]
Here is a link to Hoon and Phelps, 2003, Low-Wage Employment Subsidies in a Labor-Turnover Model of the `Natural Rate', in Edmund S. Phelps (ed.), Designing Inclusion: Tools to Raise Low-End Pay and Employment in Private Enterprise, Cambridge: Cambridge University Press. [link]
Professor Phelps has written a book, published by Harvard University Press in 1997 and re-issued with a new preface in 2007, on the subject entitled, Rewarding Work: How to Restore Participation and Self-Support to Free Enterprise. [link]
Commentaries and Op-eds
Several opinion pieces and commentaries of mine on the Singapore economy since the year 2000 grapple with the theme of the nature and challenges of growth and business fluctuations, joblessness, and rewards to low-wage earners.
Growth and Business Fluctuations
I shared some of my thoughts on Singapore's efforts to raise labor productivity in this 28 December 2014 article by writer Michelle Teo entitled "Productivity Pains" in The Edge Singapore. [link]
I was on the panel to discuss the theme "Addressing Income Inequality - Who Pays?" in an episode of the TV program Talking Point on Channel NewsAsia telecast live on 28 August 2013. [link]
Here is a an op-ed of mine published on 5 February 2013 in The Straits Times titled "The Future of Wages in Singapore" examining where wages might be heading given the past decade's wage trends. [link]
Here is a an op-ed of mine published on 4 September 2001 in The Business Times titled "What's New, What's Next for Singapore?" arguing that "there are at least three economic developments that are new [which] have potentially huge socio-economic consequences." [draft]
A contribution of mine titled "Why SMEs should aim at becoming exporters" in The Business Times on 2 July 2012. [link] An earlier commentary on Singapore Budget 2012, titled "Beyond Catch-Up to New Growth Sources," published in The Straits Times on 21 February 2012 suggests that local SMEs provide new growth sources for Singapore in its mature phase. [link]
I presented a paper, titled "An Economic Analysis of Optimum Population Size Achieved Through Boosting Total Fertility and Net Immigration," at The Population Conundrum: Roundtable on Singapore's Demographic Challenge organized by Singapore's Civil Service College and the Institute of Policy Studies on 3 May 2012. A working paper version of the paper is here. [link] Powerpoint slides of the presentation are here. [link] A 4 May 2012 Lianhe Zaobao news report on the Roundtable is here. [link]
Letter to the Forum page of The Straits Times on 1 November 2011, "MNCs and the labour crunch." [link]
My thoughts on Singapore's wage share of GDP drawn from my answers to questions posed to me by Senior Political Correspondent Sue-Ann Chia for her review article titled "First World country but not First World wages?" published in The Straits Times (ST) on 15 May 2010. [draft] Here is a link to the ST review article. [link]
9 June 2009 op-ed in The Business Times, titled, Mapping Out S'pore's Economic Strategies. [link]
(Here is a later contribution of mine, dated 25 September 2009, commenting on the objective of the Economic Strategies Committee (ESC). [draft])
Letter to the Forum page of The Straits Times on 16 October 2009, "Why Jobs Credit is special and gratifying." [draft]
14 June 2006 op-ed, joint with Kong Weng Ho, in The Business Times, titled, Perspiration, Inspiration and Singapore's Growth. [link]
22 July 2005 op-ed, joint with Kong Weng Ho, in The Business Times, titled, When the Economy Hits the Brakes. [link]
12 December 2000 op-ed in The Business Times, titled, Economic Openness: Benefits and Challenges. [draft]
Unemployment
29 July 2008 op-ed in The Business Times, titled, Less room for MAS to influence Inflation Rate. [link]
30 November 2004 op-ed in The Business Times, titled, A Fix for Joblessness. [draft]
15 April 2003 op-ed in The Business Times, titled, The Daunting Challenge of Structural Unemployment. [draft]
Low-Wage Workers
Here is a commentary of mine on Singapore Budget 2013 published on 27 February 2013 in The Straits Times titled "Schemes Work Hand in Hand to Boost Wages." [link]
30 September 2005 op-ed in The Straits Times, titled, Making Work Pay for Low-Wage Earners. [link]
10 February 2006 op-ed in The Straits Times, titled, Workfare: Striking the Right Balance. [draft]
Letter to the Forum page of The Straits Times on 26 June 2007, "Improve design features of workfare scheme." [draft]
The Singapore Model of Workfare: Three Suggestions published in ETHOS, Issue 3, Oct 2007. [link]
Selected Papers and Publications (Some links require your library's subscription)
Macroeconomics
Hoon and Phelps, 1992, Macroeconomic Shocks in a Dynamized Model of the Natural Rate of Unemployment, American Economic Review. [link]
Hoon and Phelps, 1997, Growth, Wealth and the Natural Rate: Is Europe's Jobs Crisis a Growth Crisis?, European Economic Review (Papers and Proceedings). [link]
Hoon and Phelps, 2008, Future Fiscal and Budgetary Shocks, Journal of Economic Theory. [link] [draft]
Hoon and Phelps, 2010, Macroeconomic Effects of Over-investment in Housing in an Aggregative Model of Economic Activity. Center Working Paper No. 63, July, Center on Capitalism and Society, Columbia University. This paper is one in a trilogy of papers on the analytics of the crisis and the ensuing slump. [link]
Hoon, 2009, Payroll Taxes, Wealth and Employment in Neoclassical Theory: Neutrality or Non-Neutrality? SMU Economics and Statistics Working Paper Series No. 08-2009, May, Singapore Management University. Published in Edmund S. Phelps and Hans-Werner Sinn (eds.), Perspectives on the Performance of the Continent's Economies, Cambridge, Mass.: MIT Press, 2011. [draft]
Hoon, 2010, Effects of Labor Taxes on Hours of Market and Home Work: The Role of International Capital Mobility and Trade. SMU Economics and Statistics Working Paper Series, April, Number 05-2010. [draft]
Hoon and Phelps, 2003, Low-Wage Employment Subsidies in a Labor-Turnover Model of the `Natural Rate', in Edmund S. Phelps (ed.), Designing Inclusion: Tools to Raise Low-End Pay and Employment in Private Enterprise, Cambridge: Cambridge University Press. [draft]
Here are two open economy macro papers with an endogenous natural rate of unemployment:
Hoon and Phelps, 2007, A Structuralist Model of the Small Open Economy in the Short, Medium and Long Run, Journal of Macroeconomics. [link] [draft]
Hoon and Phelps, 2002, Asset Prices, the Real Exchange Rate, and Unemployment in a Small Open Economy: A Medium-Run Structuralist Perspective, in Warren Young and Arie Arnon (eds.), The Open Economy Macromodel, Norwell, Mass.: Kluwer Academic Press. [draft]
Trade, Jobs and Wages
Hoon, 2001, Adjustment of Wages and Equilibrium Unemployment in a Ricardian Global Economy, Journal of International Economics. [link]
Hoon, 1990, Abstract of my PhD dissertation submitted to Columbia University, titled, Market Structure, Trade Theory and Unemployment. [draft]
Hoon, 1991, Comparative Advantage and the Equilibrium Rate of Unemployment, Economics Letters. [link]
Hoon, 1999, Intraindustry Trade, High-Wage Jobs, and the Wage Gap, Economics Letters. [link]
Kee and Hoon, 2005, Trade, Capital Accumulation and Structural Unemployment: An Empirical Study of the Singapore Economy, Journal of Development Economics. [link] [draft]
Hoon, 2002, Endogenous Growth and Equilibrium Unemployment in a North-South Model, Review of Development Economics. [link]
This research monograph gives a book-length treatment of the theme of international trade and equilibrium unemployment that I began to work on in my 1990 Columbia PhD dissertation. Hoon, 2000, Trade, Jobs and Wages (Edward Elgar Publishing) [link]
The book is reviewed by Peter M. Summers in Economic Record, March 2002, Vol. 78, Issue 240, pp. 113-115. [link]
Singapore Economy
Ho and Hoon, 2009, Growth Accounting for a Technology Follower in a World of ideas: The Case of Singapore, Journal of Asian Economics. [link] [draft]
Hoon, 2005, Future Job Prospects in Singapore. [draft]
Hoon and Ho, 2007, Distance to Frontier and the Big Swings of the Unemployment Rate: What Room is Left for Monetary Policy? [draft]
Ho and Hoon, 2003, Service Links and Wage Inequality. [draft]
From 1987 to 1997, I published five papers (three with co-authors who were former students of mine) on analytical aspects of the Central Provident Fund (CPF), Singapore's defined contribution social security system in the Singapore Economic Review. I will make available here scanned copies of reprints with permission given by the Singapore Economic Review. [Note: These are big files that might take some time to open or download.]
1. "The Effects of a CPF Cut: A Note," Singapore Economic Review, Vol. 32, no. 2, October 1987, pp 66-74. [reprint]
2. "The Long-Run General Equilibrium Consequences of Choosing the CPF Contribution Rate in the Singapore Economy," Singapore Economic Review, Vol. 36, no. 1, April 1991, pp. 70-80. [reprint]
3. "A Model of the Link Between the Fiscal System and Singapore's Central Provident Fund in General Equilibrium," with Kai Lin Teo, Singapore Economic Review, Vol. 37, no. 2, October 1992, pp. 73-88. [reprint]
4. "Individual Lifetime Uncertainty, Annuity Market and the Central Provident Fund," with Lai Yee Ng, Singapore Economic Review, Vol. 41, no. 2, October 1996, pp. 41-52. [reprint]
5. "Taxes, the Central Provident Fund, and Retirement Decisions," with Mei Choo Neo, Singapore Economic Review, Vol. 42, no. 2, October 1997, pp. 61-74. [reprint]
Book Reviews
Review of Barriers to Riches by Stephen L. Parente and Edward C. Prescott, Cambridge, MA: MIT Press, 2000 published in Singapore Economic Review, April 2001, Vol. 46, No. 1, pp. 145-148. [draft]
Review of Money and the Natural Rate of Unemployment by Finn Ostrup, Cambridge: Cambridge University Press, 2000 published in Journal of Economic Literature, June 2004, Vol. 42, No. 2, pp. 516-517. [draft]