ECONOMIC POLICY UNCERTAINTY AND THE REAL ECONOMY OF SINGAPORE

This paper investigates (for the first time) the impact of the economic policy uncertainties of Singapore and its major trading partners on Singapore's industrial production and exports. The study uses monthly data from January 2003 to August 2019, correlation analysis, spillover index analysis and a structural vector autoregression model to perform the investigation. Using the newly invented Singaporean economic policy uncertainty index, the research finds that it is a good predictor of industrial production. It is found that, in general, uncertainty depresses Singapore's industrial production and exports. The paper suggests that policymakers promote new entrepreneurship and build a skilled labor force to minimize the impact of uncertainty on the economy of Singapore.