tag:blogger.com,1999:blog-62974138982752666062024-03-16T15:08:25.356+08:00Economics Malaysiahishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.comBlogger1499125tag:blogger.com,1999:blog-6297413898275266606.post-66723362490604737302023-01-25T12:48:00.001+08:002023-01-25T12:48:28.755+08:00Targeting on Household Income Doesn't Make Sense and Has to GoThe Malaysian government's policies on social welfare has been for the past decade been anchored on household income categories. We've become used to talking about the B40, M40 and T20 of the household income distribution, and in popular discourse these categorisations have become synonymous with the poor, the middle class, and the rich.But the more I've thought about it, the less satisfied I've hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com3tag:blogger.com,1999:blog-6297413898275266606.post-38731357595110424112022-04-27T16:00:00.003+08:002022-04-27T16:00:00.194+08:00How Regressive Are Fuel Subsidies?My colleague Nurulhana wrote this for our internal blog. Since its self explanatory, I'll leave it here without comment and unedited. Side note: this was written last month, so the drop in oil prices since then implies a lower retail petrol price and hence, lower subsidy. Nevertheless, the point remains valid.Fuel subsidy helps the richA colleague highlighted this estimation by Tengku Zafrul hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com0tag:blogger.com,1999:blog-6297413898275266606.post-90086063641337573212022-03-29T16:00:00.001+08:002022-03-29T16:00:00.229+08:00Minimum Wage Revised Part IV: Poor SMEsI'm going to dive deeper into this topic, because there are a number of inter-related issues that need to be highlighted. The data here comes from the 2016 Economic Census, cross referenced with the subsidiary report on SMEs from the same survey.Before jumping into how an RM1,500 minimum wage might impact SMEs, let me digress into a discussion of the nature of the capital share of GDP.The 2020 hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com0tag:blogger.com,1999:blog-6297413898275266606.post-82386770863575702252022-03-28T16:00:00.011+08:002022-03-28T16:04:03.731+08:00Minimum Wage Revised Part III: What's the appropriate level?Despite the government determining the minimum wage to be hiked to RM1,500 by May 1, 2022, there's still debate on whether the timing/quantum of the increase is appropriate. This is partly acknowledged by the government itself, with the qualification that it will not apply to micro enterprises with less than 5 employees.So what's really appropriate? What's the safe level of minimum wage that willhishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com0tag:blogger.com,1999:blog-6297413898275266606.post-16375665987001122042022-03-21T20:00:00.011+08:002022-03-28T22:10:03.907+08:00Minimum Wage Revised Part II: Some Evidence on WagesPart I dealt with some of the criticisms of the minimum wage. Part II here will look at some of the data around the impact on wages and prices. For a look at the impact on employment, see this old post.How do wages react to an increase in the minimum wage? To try to answer this question, I'll use some estimates from the EPF on wages at various parts of the distribution. To my knowledge, I've onlyhishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com0tag:blogger.com,1999:blog-6297413898275266606.post-32626406538478175782022-03-21T16:00:00.020+08:002022-03-21T16:00:00.176+08:00Minimum Wage Revised Part I: Theoretical ConsiderationsSo the government has finally announced a new revision to Malaysia's minimum wage, two years after the last one. This time though, it's a whopping 25% increase to RM1,500, from the RM1,200 in 2020. Even after all these years (nine to be exact), the minimum wage continues to be the subject of a lot of arguments, so I thought I'd lay out some of the theory and Malaysian evidence (such as it is).hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com0tag:blogger.com,1999:blog-6297413898275266606.post-28241712946176148372022-03-13T20:00:00.010+08:002022-03-13T20:00:00.166+08:00Thoughts on War and the Economic OutlookIt's been a difficult three weeks, given what's going on in Eastern Europe. I grew up under the threat of the BOMB. I was born the year of the Tet Offensive and the Prague Spring, and the first twenty years of my life was under the latent threat of nuclear holocaust. That is what makes Russia-Ukraine qualitatively different from all the other conflicts of the past 30 years, beyond the human hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com2tag:blogger.com,1999:blog-6297413898275266606.post-42586391033295234212022-02-17T17:00:00.029+08:002022-02-17T17:00:00.187+08:00An Alternate Measure of InflationThe US likes to go its own way on many things, from using the imperial system of measurement (feet, pounds, miles) to American Football. In monetary policy, the Federal Reserve - which itself is an awkward conglomeration of 12 privately owned regional banks rather than a properly constituted central bank - uses Core PCE inflation as its primary policy target, unlike virtually every other central hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com0tag:blogger.com,1999:blog-6297413898275266606.post-65350351361810126692022-02-16T20:30:00.008+08:002022-02-16T20:30:00.169+08:004Q 2021 GDP: The Good, The Bad, and The UglyIt's taken me this long to really delve into last week's GDP report, largely because I wanted to try something different (results forthcoming). But before getting into that, the headline numbers themselves are mostly encouraging (log annual and quarterly SAAR changes):RGDP rose +3.6% yoy (+29.1% qoq SAAR), while NGDP rose 12.1% yoy (+61.2% qoq SAAR (!)). Overall, the economy is close to regaininghishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com1tag:blogger.com,1999:blog-6297413898275266606.post-36323344999598382702022-02-09T20:30:00.004+08:002022-02-09T20:30:00.195+08:00The Drivers of InflationWhat is driving inflation in Malaysia? For the last four months of 2021, the CPI jumped a full two points, or 1.6%, which is equivalent to an annualised increase of 5%. That would mark the strongest annual inflation reading since 2008, when the lifting of price controls on RON95 petrol saw it hitting RM2.70.If you read yesterday's post, you'll suspect its food and petrol, and you would be mostly hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com0tag:blogger.com,1999:blog-6297413898275266606.post-53816332214994986612022-02-08T20:30:00.001+08:002022-02-08T20:30:00.184+08:00The Contours of InflationThis has been the hot button topic of the year, pretty much everywhere around the globe. Inflation has accelerated in many countries, but at very different rates. Regardless, there has been a general withdrawal from both fiscal and monetary stimulus across both developed and developing countries, though the results remain to be seen.Before getting into any analysis, this is what inflation in hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com0tag:blogger.com,1999:blog-6297413898275266606.post-57981778628610376732022-02-08T08:30:00.002+08:002022-02-08T08:30:00.190+08:00Unemployed and Out of WorkI wanted to start a discussion on inflation last night, but it took longer than I thought to compile the data (it's been a while). In the meantime, here's something that's a little unique to Malaysia.Starting with the first MCO, DOSM began adding to their monthly employment report an estimate of the number of people who still had jobs, but for whatever reason were unable to work. It's a bit of a hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com1tag:blogger.com,1999:blog-6297413898275266606.post-16271301098957349022022-02-04T21:30:00.001+08:002022-02-04T21:30:00.182+08:00Silly Stagflation?A reporter messaged me the other day. With inflation rising, there was apparently concern in "some quarters" that we could see deflation in 2022. My rather flippant reply was that this was silly, which of course, the next day he reported verbatim. While I regret the flippancy, I'll stand by the analysis.Stagflation is an environment when you have simultaneously high inflation and high hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com0tag:blogger.com,1999:blog-6297413898275266606.post-32119548335843040082022-02-03T21:00:00.001+08:002022-02-03T21:00:00.171+08:00Reset and ReflectionsA long long time ago in a galaxy far far away...I started this blog. It's been 13 years to the day that my first post went live. I never dreamed when I started that it would take me on such a strange wonderful journey, down paths I never dreamed of going down. Blogging has brought me professional success and recognition, and put me in touch with many talented and intelligent people that have hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com3tag:blogger.com,1999:blog-6297413898275266606.post-65389907532539244882019-07-05T11:15:00.000+08:002019-07-05T11:15:40.606+08:00Income Mobility and Needs-Based Targeting
So much for writing regularly again. No sooner did I commit to it, I got loaded with a whole load of extra responsibilities. As a result, the last 2-3 months have been a blur, and I only now feel like I can sit down and reflect a little. That and because I have something to say.
There's a very quiet public policy debate going on about the extent of social assistance the public sector should hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com2tag:blogger.com,1999:blog-6297413898275266606.post-5832979799678679802019-03-21T09:12:00.001+08:002019-03-21T09:12:56.927+08:00The Ugly Secret About Needs-Based Poverty Eradication: It Doesn't WorkNicholas Freeland takes us through the preconditions needed for poverty targeting to work (excerpt): Poor targeting: a response to Pathways’ paper on how best to reach those in poverty In an ideal world, poverty targeting would be sensible, which is why it intuitively appeals to those who are new to social protection, or who don’t understand the true complexities of poverty. I would hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com6tag:blogger.com,1999:blog-6297413898275266606.post-11482265060123443432019-03-20T18:08:00.000+08:002019-03-20T18:08:12.213+08:00The CPI and the Cost of Living: Cross Country Comparisons
This is hopelessly unscientific, but it's an interesting exercise, and is a useful starting point for understanding what goes into the cost of living. So what I have here are comparisons of the weights in the CPI for various countries in comparison with Malaysia, selected from a set of relatively large countries with roughly (±10%) the same level of PPP-adjusted GDP per capita (as per the CIA'shishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com5tag:blogger.com,1999:blog-6297413898275266606.post-31420089310033735612019-03-15T15:26:00.002+08:002019-03-15T15:28:51.087+08:00Talking About BelanjawankuI was on BFM yesterday, talking about UM's new Belanjawanku reference budget:
Your browser does not support native audio, but you can download this MP3 to listen on your device.
One thing I should have mentioned/emphasised more is the splendid work done by Prof Datuk Dr Norma Mansor and her team at the Social Wellbeing Research Centre in coming up with it. You can also hear her talking about hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com1tag:blogger.com,1999:blog-6297413898275266606.post-28529548548868976152019-03-06T17:33:00.000+08:002019-03-06T17:33:00.533+08:00The CPI Is Not A Cost Of Living Index (And Shouldn't Be Treated As One)
With all due respect to the Minister, I think he gets it wrong here (excerpt):
Minister: New index to reflect ‘real’ cost of living
KUALA LUMPUR, March 5 — The Domestic Trade and Consumer Affairs Ministry is confident that a new cost of living index can reduce the people’s cost of living, especially in the context of the price of goods.
Its minister Datuk Seri Saifuddin Nasution Ismail hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com1tag:blogger.com,1999:blog-6297413898275266606.post-1105215764420776512019-03-05T16:33:00.001+08:002019-03-05T16:33:49.970+08:00BelanjawankuSo I was at the launch yesterday, moderating the panel session after all the speeches. So far, the reception to the guide has been…interesting, to say the least. But since the media gave little attention to the panel discussion, I though I’d set out what topics were discussed. Not that we had any definitive answers, but then part of the motivation for publishing this thing in the first place was hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com1tag:blogger.com,1999:blog-6297413898275266606.post-35529427093472049722019-02-27T12:11:00.000+08:002019-02-27T12:11:12.097+08:00Calculating Real Interest Rates Under Price Level Shifts
"You take the blue pill—the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill—you stay in Wonderland, and I show you how deep the rabbit hole goes. Remember: all I'm offering is the truth." - Morpheus, The Matrix (1999)
As a follow up to yesterday's post on interpreting measured deflation, someone on Twitter remarked that since inflation is hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com7tag:blogger.com,1999:blog-6297413898275266606.post-13821189911252312232019-02-26T17:54:00.001+08:002019-02-27T10:31:25.673+08:00When Deflation Isn’t DeflationIt’s been an awfully long time since I wrote a post. There have been a lot of reasons for the hiatus, both professionally as well as personally. The change in government last year also caused some switches in senior management where I work, and my workload has risen as a result. At a personal level, the passing of my father in June and wrapping up his estate has taken a toll on the entire family,hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com9tag:blogger.com,1999:blog-6297413898275266606.post-74947936870299469462018-08-30T08:45:00.000+08:002018-08-30T08:45:17.456+08:00Why low income households have more childrenOn social media lately, I’ve been reading this sentiment that people who are poor shouldn’t have so many children. The apparent reasoning is that if you can’t afford to bring children up properly, you shouldn’t have them. This attitude is not just paternalistic and condescending, it also ignores the economic incentives facing the poor. There are, I think, two main reasons for the poor having hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com15tag:blogger.com,1999:blog-6297413898275266606.post-35141755468230858312018-07-24T08:30:00.000+08:002018-07-24T08:30:00.558+08:00Effective Exchange Rate Indexes: June 2018 UpdateThis post is seriously late, as I’ve just switched laptops and my editing software is being cantankerous. However, the NEER and REER page has been updated, as has the Google Docs version. Summary Despite the moves in the bilateral USDMYR exchange rate, there has been almost no movement in either the NEER and REER since February. This also applied to the narrow and ASEAN indexes as well. In hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com9tag:blogger.com,1999:blog-6297413898275266606.post-26787216278532623272018-06-13T08:00:00.000+08:002018-06-13T08:00:14.211+08:00Here We Go Round the Mulberry BushOur PM in Japan (excerpt): Malaysia asking for yen credit to help with national debt, says Dr Mahathir MALAYSIA is asking Japan for credit as part of efforts to resolve its debt problem, Prime Minister Dr Mahathir Mohamad said today. Speaking at a joint press conference with Japanese Prime Minister Shinzo Abe, Dr Mahathir said he was told Japan was considering the request.hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.com13