THE BUSINESS CYCLE IN SINGAPORE

Abstract

The business activities in Singapore, a small and open economy, not unlike those experienced by some large developed economies, are subject to wave-like movements. Although the magnitude and length of the cycles may differ, they still demonstrate a similar pattern. An attempt is made in this Academic Exercise to study the business characteristics in Singapore to see if these characteristics behave according to the theories of business cycles (which are mainly based on developed economies). Some explanations are offered for activities that do not behave according to expectations. Chapter I defines what a business cycle is and provides some of the concepts related to business cycles. Chapter II provides the theoretical explanations of the business cycle and the causes of the cycle. Chapter III seeks to describe the business cycles in the Asian NICs. The other NICs are studied so as to provide a comparison of the business situation in Singapore with that of the NICs since Singapore is always compared to Hong Kong, Taiwan and South Korea. Chapter IV gives a detailed analysis of the business cycle in Singapore. The macroeconomic variables are examined to see if they behave according to theory. If they do not conform to theory, some explanations are offered. Chapter V is a comparison of the findings of this study with that of the other developed countries. The areas in which the findings are similar and different are highlighted. Chapter VI is a summary of the findings of this study. Attempts are made to forecast the future GDP of Singapore. This exercise does not make any pretensions to be exhaustive of the subject. It is hoped that this exercise will arouse interest in further studies of business cycle in Singapore as very little research is done on this subject.