An Interview with Mr Chan Kok Hoe

On 7th November 2023, we sat down to have a chat with Mr Chan Kok Hoe, Lecturer from the Department of Economics, as part of a series of interviews with faculty members.

Note: This interview was edited for length and clarity.

Yee Fay: Hi Prof, thanks for taking the time to join us in our series of faculty interviews. To start off, what made you interested in pursuing economics?

Chan Kok Hoe: So I started out in the science steam when I was a student? When it came to choosing what to do for O-Levels, I decided that I didn't want to do Biology [and Science], and so I did more Humanities. When I went to Junior College, it was also the same. At that time, I thought that I was quite interested in the human dimension, but I'm also pretty strong in terms of the hard sciences and mathematics. So what kind of subject would that work? And I thought, “Hey, maybe I can try Economics.” And I got a lot of encouragement from my teachers in Junior College so I thought, “Hey, maybe I can make a career out of it.” 

My original intention was actually to be a military engineer, but I got detoured by the junior college experience and I decided to do Economics. When I came to NUS, that was the plan initially. It was actually very cute because I had an interview experience looking for a job at DBS. You know, just to make sure that you cover your bases, right? I was talking with the two interviewers and we were getting along relatively fine, I was answering questions here and there, and at the end of the interview, they told me: “You know, I think you should go into academia.” (laughs). So that was that, and the rest was history. So I went on to get a graduate degree, and then I came back to NUS and it's been one career ever since.

Yee Fay: Was there any prominent figure who inspired your interest in Economics?

Chan Kok Hoe: For starters, I wouldn't say so, it's really the subject itself. If you're looking for personal heroes in terms of economists, one of the earliest people is probably John Maynard Keynes. He was willing and able to use his understanding of economics to actually change how people saw things and also change how people did policy. That left a deep impression on me.

When I got to graduate school. I had the chance to be under quite a number of luminaries. Some Nobel Laureates here and there. George Akerlof was a real influence in that sense, intellectually. I don’t even know George Akerlof, he won a Nobel Prize for that [for his paper “The Market for ‘Lemons’”], but he wasn't teaching that stuff when he was in Berkeley. He was teaching this thing called behavioural macroeconomics, which is basically a dead end now. The idea there was: “Hey, macro [economics] has a lot of models which can allow people to think about things in a really sophisticated manner. People have rational expectations and whatnot.” 

But Akerlof was saying, “People are not really rational. So what if we just make the assumption that a small percentage of people are not rational? Let's see how robust all the results that macroeconomics has come up with.” It turns out that the results are very not robust at all, they break down, right? So to me, that's the kind of intellectual humility and investigation that people need to have. Otherwise, they will be blinded by their own models. So basically, he was a role model for me to follow. 

Yee Fay: I understand that some of your research areas include economic development and the economics of institutions. Could you share more regarding these research areas, as well as what inspired your interest in these research areas?

Chan Kok Hoe: I think [the research areas on the NUS website] a bit outdated and I just haven't changed it. So, when I was in graduate school, I was learning to become a development economist. I was looking at issues regarding the importance of social capital in economic outcomes, and how do you measure social capital and things like that.

That kind of project didn't quite work out. So I put that aside for the economics of institutions instead. I was studying a lot of work by Oliver Williamson, who pioneered transaction cost economics, and I think he won a Nobel Prize as well for his theory.

So I thought that there would be a useful area to focus on. But since then my teaching career has taken precedence, right? Based on the kind of classes that I was doing, that's where my research interests actually germinated from. And so today, my interests are more focused on things like the Singapore economy and public economics. And because of my work teaching economics on the macro side, macro has become more important to me as well. This is how I ended up doing [the topic of] money.

Yee Fay: What was most difficult to grasp or understand in your study of Economics?

Chan Kok Hoe: That's a hard question. For the most part, economic concepts are actually not hard. The hard part is just being very careful with the math and working out the implications of the models. But once you do that, and you are able to think ten levels above it to see the big picture, then economics is not really that hard to do. I mean, the stuff that economists do is child's play compared to what the engineers are doing. So yeah, what's really, really hard? I'll probably say that it's not that the lessons are hard, but it’s that the lessons don’t stick.

The lessons don't stick because it's often economically advantageous for people not to do the right thing. In the stuff that I was doing with the financial crisis for HSS1000, that's really the moral of the story. Everybody knows from looking at 800 years of history that the financial crisis happened for so-and-so reasons: expansion of credit, reduction in regulatory controls, and things like that. 

But these things just keep happening over and over again nonetheless. So it's not that people don't know these things, right? It’s that people in the system found it more advantageous to let them happen, and then [let] the other people pick out the pieces when things blow up. So I think that is probably the main issue. It is not about understanding economic concepts, it's about following through even if your personal interests go against it. If you give me another 20 minutes, I might think of a better answer to this question, but right now I can't think of anything that is really, really hard. 

Yee Fay: What do you think is the importance of Economics in PPE?

Chan Kok Hoe: I can't say too much about the philosophy aspect, but when it comes to politics and economics, I think it is true that when push comes to shove, politics will trump economics. I think we see that right now in the current geopolitical situation, where the Americans are decoupling from the Chinese, not because it's the economically advantageous thing to do, but because they think it's what will make them secure and push the Chinese down. So we can see that politics trumps economics but, at the same time, the economic environment will shape what's actually politically possible, and economic pressures can have a big impact. 

We're seeing some of these things happening with Germany right now. Germany made the political decision that [it] would break off economic ties with Russia because of the Russian-Ukraine war, and consequently, Russia cut off Germany’s supply of oil and gas. What has happened to Germany in these two years is that its industries are crumbling. So many of its industries rely on cheap energy, and because they don't get it anymore now, they can’t even function and they are moving out. So Germany has actually deindustrialised and this will have huge, tremendous implications for the way the German economy runs and German polity, as well. So economics always finds a way to feed back into politics. So, I think at some point, it's not advisable for an economist to know nothing about politics and it's certainly not wise for somebody who's focused on politics to know nothing about economics, you have to have both.

Now philosophy is the underlying bedrock for both of these disciplines and we need to see that. Keynes had a famous saying, I don't know the exact quote, but he talked about how, behind the mumblings of politicians is the idea of an economist, some defunct economist. So the development of the ideas does inform what politicians decide to do and does inform what policy decides to do, even if the idea itself is a distillation and the reality is actually much more complicated. So, for example, take the idea in my class that central banks ought to be independent from governments. It started out as some kind of experiment, but it germinated into a full-fledged academic movement. Then from an academic movement, it kind of turned itself into policy and over the past 20 odd years, central bank after central bank has become independent. Some of it is through the machinations of organisations like the IMF, which is the political dimension. But the idea behind it actually comes from academia. 

Yee Fay: Do you have any advice for PPE students who wish to pursue Economics further?

Chan Kok Hoe: Do you mean that you specialise in economics? I don't really know how it works with you guys anymore, because I heard that the amount of stuff that you have to do for each of the specialisations actually expanded, right? 

Yee Fay: Not really. It's just that the specialisations were removed entirely.

Chan Kok Hoe: Oh, okay. So there's no specialisation.

Yee Fay: Yeah, so we were wondering, maybe for [PPE] students who want to do a second major or minor [in economics].

Chan Kok Hoe: Oh, I see. Well, Economics, as it is taught at NUS, tends to be a bit model-based, tends to be a bit mathematical and increasingly, there's a lot of empirical work in the form of econometrics, in the form of causal inference. So you’ve got to brush up on some of your mathematical skills in order to handle the modules.

Beyond that, I think you should listen to your heart about what kind of things are interesting to you. In economics, there are a lot of field courses that cover different dimensions like competition policy, labour, public and so on and so forth. So hey, whatever is interesting to you, go there. The tools are pretty much the same across the board. That's why we make you guys do a ton of core modules and that gives you problems with mapping when you go to SEP, okay? (laughs) We apply the same tools to understand the different phenomena, so you need that foundation in the core modules, and then bring it to whatever that's interesting to you.

Yee Fay: If you could create a new PPE course, what would it be?

Chan Kok Hoe: You guys are not asking easy questions! (laughs) If I were to create a new PPE course, right…There might be something to what’s going on when it comes to the pushing of social attitudes, the so-called “work dimension”. How it interacts with the way companies are designed to run themselves, how the boards of directors are chosen, and what kind of policies companies are pushing and connecting that. I don't want to go full conspiracy theory here, but connecting that to the kind of organising institutions such as the World Economic Forum. 

Well, the World Economic Forum is a very interesting institution. If you look at some of the leaders that are running many of the countries today, they have some kind of connection with the World Economic Forum when they were young. The foreign minister of Germany [Annalena Baerbock], Justin Trudeau from Canada, and Jacinda Ardern from New Zealand. They all have some connections and they are all pushing very similar kinds of agendas when it comes to social policy – sometimes economic policy as well, but mostly social policy. So, tracing how these things are connected to one another, tracing all these elements, could be the beginning of our class.

So if nobody is creating this kind of class, I don't know if I would do it. Hey, one of you guys can do it yourselves, and create your own module, right? There you go. (Laughs)

Yee Fay: If not for teaching Economics, what else did you see yourself doing? 

Chan Kok Hoe: When I was in Junior College and I was deciding on a career, I figured very early that I wasn't really a good fit for business and for organisations like that, because they are very profit-focused. They're not trying to do something that is useful for the whole society.

So when I got to decision time, I really only wanted two choices. Either I was going to go into the government, or I was going into academia. In both areas, I thought that I was doing some wider good. Academia probably won out because of [my] personality, and also because I applied for certain positions in the government service and I didn’t get them. But personality-wise, I'm probably more suited for academia. Having said that, I have to change my personality as well because you know, I need to interact with students.

So yeah, the other answer would be public service. It's important that we don't just think about ourselves. Economics may teach you what happens when people think for themselves, and that's no problem, [because] people think for themselves a lot of times. But I think the whole economy and the whole society do not work well if we were thinking about ourselves all the time – we can’t do that.

Yee Fay: What does your typical day as a lecturer look like?

Chan Kok Hoe: I would spend some parts of the day looking through the new trends that are going up. I'm looking at certain economic blogs and economic articles, trying to find things that connect to the courses that I'm teaching and the kind of work that I'm interested in. The other part is dealing with the course administration and things like that, such as emails from students who miss their classes.

A small bit is things that we do as part of our service in the university – things to do with the student society and things to do with the alumni society. And sometimes outreach, because the Ministry of Education has this and that, such as this grant proposal available to you, things like that. 

So that's most of the day. Then, [we have] a small little part of the day where we can focus on “Okay, how [can I] make my class a little bit better? How can I restructure this particular tutorial now that this new event has come up and it's interesting to students and stuff like that?”

Yee Fay: Sounds interesting, maybe it’s time for me to consider a career in academia. 

Chan Kok Hoe: The only bad thing about academia is that the demographics are against us. Classes are getting smaller. So I don't know whether the positions will be there. They need people like myself to be out, then people can come in. 

Yee Fay: What are some of your interests/hobbies outside of work?

Chan Kok Hoe: Because, as you know, of my personality, I'm not really a very sociable person. So, I don't partake in a lot of these kind of social activities and all that. But I do a little bit of hiking. Some of it is to prepare for certain trips to certain places just to see mountains. 

So, recently during the vacation break, I was in Tanzania, so I went to visit Kilimanjaro. That's seven days to the summit and one day back, so an eight-day trip. You can see a lot of things here and there. To do that safely, you would probably need to train a bit, so I do quite a bit of hiking and running here and there. But being the introverted, insular person that I am, even during the weekends I spend quite a lot of time actually looking at [school] material, seeing what's going to work and what's not going to work. So [I think I’m] a little bit more work-obsessed than healthy.

Yee Fay: Are there any academic-related projects or modules that you are considering initiating in future?

Chan Kok Hoe: I've been doing a lot of new things over the past few years. So over the next year, I do not expect to make any innovations. What I do want is to revamp some of the modules that I'm doing right now and make them all together better.

This is a tough process because it involves tearing down the things that you have built up over the years, things that you're familiar with. So like public economics and public finance, I think it needs an overhaul. It's not a new module, but it will be a kind of regeneration of the module, to refresh it and make it more relevant.

Same with EC1101E. And with PE modules, it’s a never-ending process, because things just happen all the time. New things are coming up and so it's always being renewed. So, a brand new module project is not for the next year, I don't think I would do that.