Prime Minister Lawrence Wong has urged Singapore’s economists to exercise sound judgment and recognise the limits of increasingly sophisticated analytical tools, including artificial intelligence.
Speaking at the 25th anniversary celebration of the Economist Service (ES) on Wednesday (Sept 30), PM Wong said economists should not become overly reliant on forecasting models or technical tools when advising on policy.
“Economics is not a crystal ball,” he said, noting that economic models are simplifications of reality and cannot fully account for shocks, technological advances and changes in how people and businesses behave.
PM Wong also warned economists against being “captive to an ideology” or to technical methods, saying analysis should be used to test ideas rather than simply support pre-determined conclusions.
“The most enduring value of economics lies not in any particular theory, model or technique. It lies in a way of thinking,” said PM Wong.
Rather, he said economists should remain guided by three enduring principles: that prices, costs and incentives matter.
“These basic principles of economic thinking have stood the test of time. They help us think more clearly about our choices – the trade-offs involved, the incentives we create, and the consequences that follow,” said PM Wong.
Economist Service to build new capabilities
The event, which was held at Parkroyal Collection Pickering, also featured reflections from economists on how economic analysis is used to inform policy and respond to emerging challenges.
Speaking to AsiaOne on Wednesday, Dr Tan Di Song, senior lead economist at the Ministry of Trade and Industry, said economists play an important role in helping the Government identify emerging risks and make evidence-based policy decisions.
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