Small Change

Beyond 'cash in, cash out'

What is important is to keep the big picture in mind to make good financial choices

The first time I heard the syllables "no-dex", I had no idea what word that was, or even how to spell it.

A quick consultation with everyone's favourite Google told me I was looking at "Nodx", or non-oil domestic exports.

Okay. I was on more familiar ground. More exports means more money for the country, right?

A few weeks ago, a small-business owner riding the digitalisation wave said of his less Web-savvy counterparts: "They are quite used to what they are doing - cash in, cash out."

Well, I thought, that is a fantastic way of describing the average schmuck's approach to finance.

I count myself among that number. "Cash in, cash out" is my chief concern, whether I am scanning my own bank slips and budget spreadsheets or looking at financial statements to write up articles at work.

But surely there has to be a lot more to the economy than that, I also tell myself, dimly remembering how university classmates who read economics spent many sleepless nights running regression analyses on complex statistical software.


For those of us who do not have degrees in economics - which is most of the country - how much do we need to know about the big picture?

Temasek Polytechnic lecturer Hansen Yeong explains to The Sunday Times: "Economics examines the fundamental question of choice and its impact.

"It is as relevant to a child's decision to have cookies or cake, as to a government's spending on welfare or infrastructure."

Mr Yeong, who teaches economics in the polytechnic's School of Business, adds: "It is likely many already understand some economic concepts and principles, but may not use the jargon."

Shorn of jargon, then, how sophisticated can lay understanding be?

Surprisingly so, according to economist Tan Khay Boon, a senior lecturer at SIM Global Education.

"For example, the topic of fixed monthly supply of COEs (certificates of entitlement) can be raised as an example to illustrate the concept of perfectly inelastic supply - an economic situation in which the price of a product will have no effect on the supply," he tells The Sunday Times.

"In another example, demand-and-supply diagrams can be used to illustrate the correlation between the increase in the number of COEs and lower prices of COEs."

The urge to revamp and update lay understanding of economics has been keenly felt in the wake of the last global financial crisis, New Yorker staff writer John Cassidy notes in a recent review of a new economics curriculum.

The collaboratively designed Core Econ project, which comes with a textbook called The Economy, seeks to make the subject more accessible and relevant.

"Traditional, wallet-busting introductory textbooks do cover topics like pollution, rising inequality and speculative busts," Mr Cassidy writes. "But in many cases this material comes after lengthy explanations of more traditional topics."

So a modern teaching approach involves addressing topics that students consider urgent priorities, the international group of academics behind the Core Econ project says.

Those issues, like environmental sustainability, wealth inequality and unemployment, indeed seem like concerns that young people want to see solved - or at least talked about - when we mention the economy.

A friend of mine in her early 20s, who did not study economics in depth, recently recommended Economics Is For Everyone, a book by Canadian unionist and economist Jim Stanford.

Dr Stanford writes in the introduction: "Quite apart from whether you think capitalism is good or bad, capitalism is something we must study. It's the economy we live in, the economy we know."

His critique of the market may sit at odds with other experts' perspectives on the discipline.

But even as Dr Stanford leans left, he is also making an argument about the democratising effect of knowledge and the importance of knowing what is going on around you.

That is a message that we can all get behind.

SIM Global Education's Dr Tan says "the principle behind teaching economics as a subject is to help people learn how to achieve optimal efficiency with available resources" - a goal that applies regardless of the analyst's political persuasion.

Over the past few months as a business reporter, I have come to realise that I can leave the Stata and R software to the technical experts, who are all too happy with their number crunching.

"Cash in, cash out" works just as well for me as for the fishmonger in the wet market, who is no fool even without a fancy economics degree.

But what is important is to keep the big picture in mind, helped, perhaps, by online glossaries like Investopedia or lessons for the general public on massive open online course (MOOC) platforms.

Says Mr Yeong: "There is definitely space here for micro-learning and short courses on understanding economics better."

But the public is already likely to keep an eye on figures like gross domestic product growth and unemployment, to get a sense of whether it is time to go for training and avoid big-ticket purchases, he says.

"As most Singaporeans are home owners, I would probably also watch out for interest rates if I had bought my property at the time when loan interest rates were low... I would have to take a closer look at my loan servicing ability."

Although a study of the economy can plunge much deeper than these figures, Mr Yeong says that "even a basic understanding of these can help make sense of one's environment, make good choices".

Dr Tan adds: "Newspapers are more commonly read by laymen and are one of the more effective tools to promote understanding of the subject. General economic articles by journalists - aided by examples such as how changes in property prices and COE prices will affect laymen on the street - will come in most useful."

A heavy responsibility for a rookie reporter indeed. Time for me to brush up.

A version of this article appeared in the print edition of The Sunday Times on October 22, 2017, with the headline 'Beyond 'cash in, cash out''. Print Edition | Subscribe