TRANSCRIPT

Becoming an Economics Professor - Jamus Lim | The CJH Podcast EP22

*Captions are taken directly from YouTube and may not be 100% accurate

[Music]

job all right so welcome everybody today

we have jamus Lim in the house thank you

so much for being here thank you coach

Jason okay a little bit about him he's

an associate professor of Economics at

Essex business school and a member of

parliament of Singapore representing

Sina uh previously he was also the chief

Economist of the third rock group and

investment and we wealth advisory so I

am thanks for having me in your show

thanks thanks for being here thanks for

taking up your precious time uh to be

here to hopefully Inspire the Next

Generation right I'm always curious

about why somebody would actually go

into a certain job that they do and my

fundamental um need to be able to try to

share is that why people can actually go

to jobs that they are passionate about

or is it even an elusive thing that we

should actually follow our passion and

things like that so I just want to find

out from you like um what happened when

you were young all the way to where you

are now as a professor in economics so

first I'm glad you raised the idea of

how we are as youths because I think we

are truly a creature of how we were

brought up and the kind of setting that

we were brought up as it turns out my

mother grew for most of her career

worked in the stop brokering house she

worked in the back office but

nevertheless I had been very fascinated

with Finance at least at the time and it

was always something that struck me as

exciting and not just exciting but but

mysterious in an exciting way

so given the Singapore's a financial

center I think it's not unusual for a

number of us to see this of course the

fact that usually people who work in

banking and finance are fairly well

remunerated adds to that mystique and

that desirability if you

will so I accompanied her to the office

on Saturdays at times and my first temp

job was probably when I was way too

young let's not devouge when I I I did

that but uh I and it wasn't bring bring

your family to work there no no it was

in it was in her office okay okay so

actual job actual job okay it was

painful because we were in the back

office and at the time although

everything was automated yeah was

nevertheless still a lot of manual data

entry so I till today I can key in

numbers on the on the number pad really

fast

so uh it's something that I was thrown

into the deep end of what it was like

working in the back

office and while it did diminish my

passion

for back office

operations it only I think added to my

interest in the field in general and so

I quickly started learning about how I

could potentially have a career and I

learned that well you honestly don't

need that much skills to be a stock

broker if that was what I wanted you

need to make good calls yes but you

don't really need a lot of Education

right so I briefly contemplated well

what if I dropped out old level after I

finished my old levels and just became a

stock broker and Mom would have none of

that yeah so the next best thing was to

think about Alli professions and so I

got interested in economics and at the

time for me econom omics was largely

synonymous with

finance and it was only when I started

studying it as an

undergraduate so my undergraduate

studies

were on economics but it was with a

business degree so I had to actively

pursue as many economics courses as I

could I even and the majoring economics

but and through that journey I exposed

myself much more to a range of fields

within economics and I learned that

economics was much deeper than just

about Finance in fact Finance is barely

emphasized in economics except for one

specific Branch Financial economics and

instead it what fascinated me most

within economics was an understanding of

individual Behavior optimizing

individual Behavior how they one may

deviate from that optimizing behavior in

systematically predictable fashion

that's now the field of Behavioral

economics and in

turn uh the application to macro

phenomena that we observe that matters I

when late in my undergraduate years I

experienced like many singaporeans did

the global the Asian financial crisis

9798 and that was obviously I think a

life shaping event I wanted to

understand why we went through a crisis

and so that began a process of interest

in international economics which is a

field in economics that is interested in

the relationship between countries part

of that relationship is trade but a big

part of it is what we call international

finance the exchange of capital between

countries what gives rise to currency

crises uh and so

that led me to work on the thesis as an

undergraduate on this topic so it was on

exchange rate

regimes and um it became clear that if I

wanted to be serious about being an

economist I couldn't just stop at

undergraduate studies

so went on to the master's degree and

from that it became clear that I

couldn't just stop at the Masters and so

I went on to the PHD and then after that

apparently I learned that a such thing

as a post do then you go on to

that and of course my mom

who had hoped that I would stay in

school past the O Level yeah uh came to

now

wonder why don't you why don't I stop

she sent her brother to counsel me and

say why don't you get a real job instead

of staying in school stop thing in

school so I was lucky in that now I

still get to

pursue questions in economics and and

that's what I do that's my job so I'm I

fell in love with the subject never

looked back and it was something that I

keep doing because thankfully I'm not I

didn't go down the route of I don't know

um 18th century romantic poetry where

the potential Market is just a little

bit smaller so lucky there and so I've

continued on in international economic

right so the only time that

you U Peak the interest of Economics was

only in undergrad well I think undergrad

is

when the parameters for what you need to

do to succeed in a given profession

become a lot clearer before that you

kind of have vague notion of what you

want to do for your career when you want

to do and you grow up you know and it's

only an undergrad where requirements

become clear you need to take these

courses if you want to practice as an

economist and be respected you need to

have an advanced degree you can't just

stop at the undergraduate level and so

on and so forth so I think it was only

at that stage where I had to take

the the path of becoming a a

professional Economist a lot more

seriously right and before that there

was no notion of Economist being an

economist at all no it's all Finance you

know to be fair my parents they both

dropped out of high school right

equivalent High School my father didn't

finish its old levels my mom did but

then she stopped there she they went

straight into the workforce they were

not in a position to counsel me on what

my options were and I think that's

something that's underappreciated I

think those in our parents

generation they worked hard but they

never truly understood what options were

out there available for them to pursue

and we are so lucky in that we now have

been presented with a much Fuller slate

we have career guidance counselors and

the like and the information if you

really wanted to is all available online

as well we now have mentorship systems

to give internship systems to give

people a taste in the past when yeah I

wanted to do it I got a job right in the

field but now you have an opportunity to

have if you will tasting of what life is

like in that profession and I think

that's immensely valuable lets you kind

of find your way to whether you truly

want to do this for the rest of your

life anyone that has done a PhD will

tell you before you embark on a PhD

especially if it's some a student that

is asking should I pursue a PhD you

always tell them look at some point

especially in your later years of the

PHD all you do is sit with your your

thoughts usually in a dank

basement doing nothing other than think

about this topic yeah and it's not even

a broad topic usually the broad topic

that most people approach a subject with

gets narrowed down into something really

really esoteric yeah this little knob of

information and you become a world

expert in that little little niche

literally a niche but you got to really

like it because if you don't nothing is

going to keep you going and almost

invariably those people who don't have

that deep thirst to push it through they

drop out right right so bring me back a

little bit when you were younger uh and

if we think about jobs a lot of times

when people get a degree sometimes they

be like I'm just getting a degree at

this point of time I might not want to

do that degree right because I I might

have I might have the opportunity to

explore different interest that I have

uh I believe that when it comes to this

whole idea of passion there are a few

things in passion uh three three pillars

and one of them is interest um you have

interest you had an interest in finance

uh when you went to your your stock

broking and all that right then after

your interest in Economist being an

economist uh economics right and

behavioral economics any other interest

that you had when you were younger like

hey maybe I should just explore that

instead

so when I was younger I Lov the Arts

it's not surprising my dad was a

musician so he was an artist

fundamentally at heart

so I did music he disabused me of any

notion of making that my career he

didn't want me to be a Starving Musician

but he did allow me to Foster that

interest and I ended up playing

instruments as a

result but I really love to read so the

natural progression for that and I did

fairly well in English language and

literature so natural progression would

have been well why don't I major in

English when I was uh in University and

that was something I seriously

considered mom of course would have none

of that it it was something I seriously

consider and in some ways I was very

lucky I was very good at

writing kind of more flowery pieces I WR

poetry in my second school years and I

liked exploring different elements of

language but I was able When I Was An

undergraduate to transition into writing

expository uh pieces MH and I think

that in fact writing is an underrated

skill in a lot of professions and

especially so in a social science like

economics where

a big part of it is scientific in nature

you analyze the data you develop

rigorous formal mathematically based

models but a big part of it is also

asking interesting questions and part of

being able to ask those questions is to

motivate those questions and motivating

them not just for yourself but for those

that are around you your peers at least

and so writing becomes a key input into

that

so ever since I became a professional

Economist I practice an economist I see

myself as much as a writer as I see

myself as uh technician if you will so

I'm lucky in that being an economist

allows me to marry both of these

interest together so in a way I don't

feel like I've compromised in any way uh

you know know one of the other things

that professors get to do is they get to

write books so if I really need a long

form

Outlet working on the book now I I am

enjoying that process of writing down my

thoughts and I Kai my best friend is

German and he likes to say that I tend

to write in a bombastic and pedantic way

and I'm like yeah but the what's the joy

of writing in a t

boring way like chat GPT would crank out

stuff right no no I want to write my

style and nice things that with your own

book you turns out you can right so

there was a path uh if I were to think

about like Multiverse jamus in a

different Universe could have joined

could have gone through that path of

English language and English English

literature and all that yes and again I

maybe I would eventually have wandered

back into this area I may have started

off in in English and then realize that

hey I need a little bit more of a

theoretical edifice with which to hang

or structure my thinking that that's one

of the strengths of Economics I think it

really helps to structure your thinking

of course in a specific way in a way

that the feeli trains you to think but

nevertheless it is a way of thinking

through problems we call it thinking

like an economist and I think that has

served me well in life and perhaps even

if I were a writer I would have wandered

into that direction of wanting to

structure how I approach problems and

analyze problems with this form of

thinking so perhaps I would have gotten

there after all besides music uh English

and economics was there any other

interest that you had that you that you

thought when you were younger that hey

actually this could be potentially my

job in the future yeah so um I did want

to be a lawyer at some point okay

I

was as I mentioned I'm interested in

language and

articulating arguments I I was fairly

argumentative as a child some would

argue I'm still argumentative as an

adult right uh so

that it was natural to consider whether

that could be a possible job and of

course lawyers have quite a lot of

respect in society at least in our

society so it's and that's something

that our parents understood right

doctors lawyers exactly doctors lawyers

maybe third the third tier would be

engineer right if you couldn't make it

in the top two Asian professions you go

engineer but but they understood it

compared to Economist compared to oh I'm

majoring English like what is that me it

so so so for sure uh when I mentioned

that law was something I was interested

they were like yeah you know we will

support you very good um well as it

turns out after my ear levels which was

the first time in my academic life where

I had a clear

setback up until then I had generally

done well enough to just get into the

schools that I wanted to and and that

was the first time where I didn't do

well enough to have qualified for law I

qualified for N US economics at the time

other economics departments and other

schools but I didn't get into

law actually I didn't even try because I

wouldn't have met the cut offs and

so that's when it led me to reconsider

and I'm I'm grateful because I think if

I had gone on in law now on hindsight

when I look back at it all the

interesting questions in law for me are

those that have to do with jurist

Prudence as well

as um

justifications especially economic

justifications for the law in fact

there's a field in

economics called law in economics and

it's one of my co-advisors in grad

school as it turns out that's his area

and

he the the the field essentially

questions the premise behind the laws

that we have and usually

structures that questioning along the

lines of well is this economically

efficient does this make sense from

economic perspective and so this has in

a way come a full circle now for me

because in some ways I'm a lawmaker but

at the same time it's something where I

feel that my training in economics lends

me a a certain lens yeah to probe the

law that maybe if I were train as a

lawyer I might not be as questioning or

at least I would question it in a very

different way yeah so the economy is

part of you sees policy now in a

different way and um um what what I hear

a lot is the idea of like challenging

something right the idea of challenging

something whether it makes sense uh as

an if I wear my hat as an economist if

it doesn't make sense then let's try to

see what we can do yes and and that's

where you're coming from that where that

legal aspect that that um economy aspect

and then also the last one is the

English aspect which is the can the man

on the ground understand what I'm saying

yeah so I've been lucky right I've been

lucky in that not everyone that feels

that there's a problem with some element

of public policy or the

law is also able to have a forum where

they can express that this content if

you will so I've been lucky in that the

voters of sang have felt that I

represent

enough of perspective that they would

like to hear that I've been able to in

fact

articulate these things in a forum where

these matters are being deliberated and

debated so I like to think that I bring

a perspective to the table that may not

always

be immediately appreciated or understood

but at least I put it on the table yeah

uh I put it there for consideration I

would usually have done my homework in

thinking about whether this is something

that is defensible makes sense does it

kind of pass the internal checks right

and once it has and we have deliberated

it among ourselves I feel that I'll be

in a position to then Advance it and to

carry it and and you have of course you

have to have enough belief in that idea

to carry it so I try to make sure that I

can back up what I say as as much as I I

put it on the table with evidence that I

draw from the rest of the world with

also internal coherence in terms of the

arguments but yeah that's that's what I

do and again I'm I feel very lucky that

I'm able to do so right so the the the

careers that besides music the careers

that you almost were going to embark on

is kind of coming back full circle in

terms of uh serving the

nation interesting uh again yeah it so

I think one of the things that uh

animates purpose yeah in life and we

were discussing this before yeah

is that when you think about why we are

here on Earth and you think about all

the things that you could do with life

and what kind of Legacy you want to

leave behind yeah

after an extended period of soul

searching I arrived at

the notion that for me at least it was

to do good unto others

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and that notion of doing good unto

others of course as we discuss as well

is common in many religions but I think

it is almost A- religious in a way you

can step back from religion and say

actually even without the framework of

religion doing good for others

has some biological content you want to

perpetuate the human race and so on but

it also has uh a kind of more spiritual

ethereal aspect that doesn't require a

belief in religion it's just the idea

that I do good to my fellow man and

woman because that ultimately is what

will last

through time yeah so that comes to the

second part when I talk about this whole

idea of passion uh where um one is the

interest that you have um and if you

want to follow your passion there's

another part whether or not that passion

uh is part of this thing called values

and what do you value most and you

mentioned that is really the idea of

serving others doing unto others how

about as a professor how do you live out

that passion of serving others when you

are teaching your students oh when I was

a teenager one of the things that we had

was we had this visits by different

people to the

I was in junior college right so the

visits by different different guests

speakers and they were trying to talk

about their jobs and so on just to give

us some idea Inspire us and as it turns

out one of them one of the speakers was

a teacher and he was uh teaching in a

regular school not in the

university and at the end of his talk I

remember he asked the and the auditorium

was full it was full because we were all

forced to go yeah

the auditorium was full and he said

anyone will consider being a teacher and

there was deadly silence right and

nobody raised their

hands and it

was and I think he lost his patience a

little

bit and he was justifiably disappointed

and he he said something that did stick

with me he said well look if you

guys the of uh the schooling system

would not contemplate teaching and

passing on of knowledge to the Next

Generation then you are in no position

to criticize should your children not

succeed because you didn't step up to

the plate to do this you felt that it

was better to Outsource it to someone

else and and so I see that as huge right

so that hit you oh it hit me uh yeah so

I I actually then asked the question

I felt guilted enough to to ask question

but but beyond that I think it's stuck

with me and I see myself now in fact if

someone asks me someone who doesn't know

who I am ask me so what do you do I say

I'm a teacher because that's one of my

more fundamental identities I see myself

as someone that teaches and of course

teaching not just a subject in my case

economics but also

imparting values yeah of course the one

that I impart hopefully most of my my

sense of values to is to my own daughter

but beyond that I'm also I also have the

privilege of imparting those values to

students that come through my classroom

and to hopefully Inspire them maybe to

become teachers maybe to become

economists but even if they don't to at

least help them to understand the world

a little bit better and to understand

their place in it and how they can

contribute to that with their

god-given talents and so on so so I

think that's huge I think the the

element of

values

certainly infuses a lot of what we do

and I've been lucky as I explained that

my values were such that they whether

it's in public service or uh in teaching

that these were things that I was able

to help others with it was entirely

consistent with with these values you

didn't mention this in introduction but

one of uh my earlier jobs it was at the

World Bank and there our job was to work

on

relieving poverty

worldwide and so that's the mission of

the bank to imagine the world free of

poverty and so

we were

really we were really inspired every day

to go to work because it was something

that really gave a lot of us purpose and

of

course after some time as you do it like

every job you do get jaded you sometimes

think that you're not making much of a

difference

but certainly well we were there

and many if you ask them to dig deep and

think back on what led them into that

career to begin with that Korean

International civil service

really started also with a desire to

help those uh that couldn't help

themselves right and you make such a

difference imagine with some policies

that you propose especially in the

developing country you're affecting not

just dozens you're affecting Millions

potentially of lives and by the same

token with bad policy advice you could

be messing up millions of lives so you

take I think you take that

responsibility and that burden in very

seriously mhm mhm did you ever think

that after studying so much that you

would actually go into almost like

Public Service uh in the world

bank so why not just go straight to just

teaching yeah yeah so here's the funny

thing right I I did I I spent a year

teaching in Liber arts college in

Kentucky and it was one of those things

where because of the values of your

professors which is that they placed the

highest possible value as uh to be in

Academia right that was their sense of

identity their sense of purpose their

sense of meaning and so when I

ultimately chose to leave Academia for

the World Bank I really had to

rationalize it within myself within

myself and a little bit to my professors

who were just happy that I ended up

Academia to begin with and It ultimately

it came down to um a number of factors

it was it seemed like an opportunity I

couldn't give up that there was a

possibility to make a difference as I

shared I was still relatively young so

DC seemed like an exciting place the

fact that they doubled my salary didn't

hurt um but at the same

time I felt that I was able with my

knowledge to do good yeah in the world

and for others and I think that

really became the thing that swung it

right that sense that okay I at least I

try and if I fail that then I would have

known that maybe that wasn't for me but

at least I had to try and when the offer

came around and I was and and I end up

spending seven years there so clearly I

I kept enjoying it uh it it

was I

think meaningful to a point where it led

me to think about public service here it

was one of those where I had seen and uh

contributed toward public policy making

so many countries worldwide I had that

wealth of exposure yeah uh and

experience and it was well why wouldn't

I bring it back to the country that I

know and love so that was natural there

all right thank you the the third one

I'm curious about is that we we talked

about interest we talked about values

and the last one is this W of strengths

and I Define strengths as things that's

almost like it's your innate wiring like

since young you are like that and you

you are wired for certain things so some

people are wired for numbers some people

are wired for design right and that

wiring doesn't really change it

expresses itself more but you don't

really change camps right what will you

what will you say is your strengths

where since young you saw that this was

a pattern in your life and you were

wired for

that

so I tend to be quite varied in my

interests and by extension I think my

strengths and if I may I I would want to

put it to you and to everyone

that there really a lot more

endogenity by which I mean an extent to

which the more you do something the more

it the feedback mechanism Alters what

you may think of as a strength and on we

were discussing how you could see this

as a competency but you just said well

maybe you're a numbers guy maybe you are

more design guy but no that's my point

actually I I don't think I'm a numbers

guy

I when I was young I had some facility

with numbers but things like calculus

and going through Epsilon Delta proofs

they they took a lot out of me I if I

did it enough I could grasp the concepts

and I could replicate it but it wasn't

something that came as natural as I

don't know someone like ramanu Jan right

so there are people who are perhaps

really really born with that innate

talent

but when I wanted to become an economist

and that was something that I was

passionate about it became clear that I

couldn't be a good Economist without

also having an analytical mind that was

good at solving models that was also

good at staring at data and breaking it

down and understanding it and then it

was like the

ends uh became NE the means were

necessary to get to the ends and so for

me I just suddenly Found A Renewed

purpose in doing differential calculus

because differential calculus is what

you need if you want to succeed as a

professional e ecomist and so I got to a

level where now I can very very

comfortably read Journal articles I

still need a pen and paper or pencil

probably and paper to work through the

equations and to derive them and so on

and it's not

always natural or easy but it's

something that I would now say that I

have a facility of numbers but again I

didn't start off as a numbers guys so

that's my point that I think the kind of

strengths that we inate

have um may be a lot more mutable than

many of us think

so that said perhaps I I I would like to

say that the strengths I have are

reflected back to me so people tell me

hey you're pretty good at this right so

I take that as feedback and I think okay

well maybe I'm okay at this and and

together with self-reflection yeah then

you kind of form a package of what you

think your respective strengths are and

I think to get to the the Crux of your

question I think it's valuable to know

that because if you know what those

strengths are when you know what you're

relatively better at yeah then you would

be able to push along that Advantage yes

uh economists call that your comparative

advantage so in fact the interesting

thing about comparative advantage funny

enough I was teaching it in class this

morning is that comparative some people

like like to think of Advantage as well

I'm just good at this right so that's an

absolute Advantage so you could

be really good at math and you could be

really good at painting so so math and

painting you're really good at both of

them then you're D Vinci something like

that but maybe

you are just that little bit better at

one of them yes and the theory of

comparative advantage says that you

should focus on what you're relatively

better at y but just flip that around

imagine that you think you are really

bad at everything mhm so not very good

at science and not very good at

Arts but you suck at one relatively less

yes so you choose which one you suck

relatively less and you focus on that's

still comparative advantage so you do

what you suck at least Y um and that's a

lesson in life right I mean I think that

just because you can't be at the

frontier as someone else it doesn't mean

that you don't push along your

respective strengths and I think there's

enormous power in knowing what these are

identifying what these are for you so

that you can push along those lines

right I I do have this um Theory

whenever I I share or framework whenever

I share with the people I coach the idea

that um we have probably two or three

mountains in our life where we have that

comparative advantage it's almost like

the we have the unique selling point we

have the you have an unfair advantage

over other people it's almost like that

you see that person go up on stage and

do a MC for DND D and you ask him well

you did a such a good job how do you do

that it's like no my first time I like

what how is that possible and we know

that something about speaking is that

mountain for that person and all of us

probably have two or three only but we

have hundreds of valys so the idea

behind this idea of strength is that why

not instead of trying to fix all the

things that is your weaknesses why not

just maximize the strengths that you

have and that could be depending on your

level of caliber that comparative

advantage can be here it also can be

here yeah and and anywhere just as

important I would say you know where you

are yes you know where you stand

relative to others

but there's absolutely no reason why

your aspirations should not be set high

right so back to my

field perhaps I may never publish in

some of the very tippy top journals in

my

profession doesn't mean I don't try but

and it and just as important it doesn't

mean that you don't Benchmark yourself

yeah

to what justifiably is the top of your

profession right because only by doing

so can you try to push yourself closer

toward that you don't set something

where your standards are not world class

and then you say well yeah okay I'm the

king of the mountain but you're the king

of the local mountain right so you want

to you want to at least know how far you

can go and what you want to Aspire to it

when when I think about this whole idea

of um uh passion and uh how you have

found that passion and it's kind of

almost like you fell into it right you

you study economies uh economics and

then hey I kind of like that and you

talked about behavioral economics which

I really enjoy as well this Dan O'Reilly

and then it's like irrational

predictability I love that the idea that

human beings are not rational right and

to have a study about that just want to

uh understand from you like um when you

think about uh behavioral economics

right then we then you go into this

whole idea of policy right um what is

one interesting thing that you have

found in the work that you did is like

oh actually when you turn this down this

thing moves and I didn't nobody knew

that mov but that really moved either in

your world bank and the things that you

do because there's that butterfly effect

that nobody saw but actually when you do

this that

happens curious yeah yeah absolutely

I'll make a couple points first and this

is a little bit of a tangent Dan arieli

unfortunately in recent times if you

look him up has some of his work has

recently been questioned oh uh

for

fraudulent data so we'll leave that as a

just a tangent and an S and as side I

think it doesn't diminish yeah the fact

that he did popularize for many people

the field of Behavioral economics I

mentioned my best friend Kai earlier on

he as it turns out he is an actual

behavioral Economist so he has S one of

his master's degree was yeah like me

he's a bit overeducated so one of his

master's degree was in uh psychology and

so he has always brought sensitivity to

an alternative way of thinking that goes

beyond just straight up rational

approaches even though he is also German

and so going back to the question about

public policy I think having that

sensitivity helps us I think to be much

better public policy makers because

economist are often too innocent

about exactly how the ideas will play

out when they put it on the table and

perhaps I have these blinders myself

because I certainly don't have uh all

the information that is available in

making decisions when as much as say the

government would nor would I have

absolutely absolute Clarity over exactly

how a given policy once its rule outward

lay out but nevertheless I think having

a greater sensitivity to when something

might or might not work because of

systematic behavioral

deviations from something is one reason

why at least for me I

isue policies that I think sometimes in

Singapore we have too much of that kind

of over engineer things that try to fine

tune to a certain min and sometimes you

can use technological solutions to bring

about

that that fine-tuning MH so Erp is one

example right so the technology allows

you to genuinely fine tune to the minute

and the second how much you are going to

take in terms of the toll yeah but

sometimes we forget

that fine-tuning has also exerts a

potential psychic cost when people feel

that now you can imagine that someone

that pays a one off into something

right to stay on the topic of traffic

imagine you buy a season parking yeah um

That season parking let's say it's 50

bucks and you end up using less than $50

maybe if you had a an hourly kind of

thing and you go in and out on a

with a timed meter you may end up only

paying $45 y but the fact that every

time you go in and you go out it beeps

and you see this is how much it costs

that has exerts a certain psychic cost

on you when you are constantly reminded

of this expense as opposed to that one

off so even though that repeated

charging May ultimately be more

efficient it may cause more discontent

as a result of this it the frequency

with which it reminds you that you have

to make this toll

so another there's a psychological

aspect there's a psychological aspect to

designing policies that we have to be

sensitive to that even if you are going

to give up a little bit of efficiency in

exchange for some other objective right

like Simplicity uh like flexibility like

it if we have these other objectives

also in mind and then it becomes a

matter of I know what the economist

would argue in terms of what we should

be doing in terms of efficient outcome

and absolutely you should work that out

yeah The Economist tells you that you

really should at least understand what

your Baseline is yes and then permit

yourself to deviate if you feel that

some of these other objectives should

have more of a weight we think that

we should have a little bit more weight

on Equity as opposed to efficiency and

think about our social welfare system

our social welfare system is extremely

stringent so they go they really are

very intrusive so if you go to the

Social Services office for help they

will ask you to give your bank accounts

for everything everything do you have a

pet everything list your expenses down

to to the

scent

unfortunately this is meant ultimately

of course to S out the one or

two make the system most efficient yeah

right but then you don't serve the eight

other people yeah that say that really

would be ineix generally wouldn't abuse

the system but find that this hurdle

this hurdle rate is just too high for

them to pay they just value and we have

literally been told this by residen

right I just don't want to yeah do this

is too intrusive and just for what they

in their words is a pittance is for $300

why should I go through all this right

so the psychological cost sometimes is

never um so it's the almost the

relational aspect compared to the

results aspect the mathematical formula

as in a highly efficient system where

emotions are taken out of the room

compared to psychological host uh that

is something that uh would you say that

the whole idea of be behavioral

economics and my point is yes that you

shouldn't just have one you should

consider both of these yeah or more

generally as I mentioned a suite of

objectives that go beyond just

efficiency when you try to structure

public policy Simplicity as well

something that is just simpler to roll

out uh may just be a little bit better

because it is just less subject to being

gamed why most economists favor

something like uh a carbon tax so

there's an alternative to a carbon tax

it's um it's the idea of cap and trade

you cap the total amount that one can

pollute and then you allow firms to

trade with one another any Economist

even an undergraduate will be able to

solve out and show you which one is more

efficient but economists often still go

for the Comax because it's less likely

to be gained so they even economists

understand that sometimes Simplicity is

a virtue in and of itself the minimum

wage the reason why I am in favor of a

minimum wage it's just because of the

simplest everyone can see this is the

living wage that gives someone who works

dignity for what they do MH as opposed

to some sophisticated system where you

have all sorts of ladders and tears and

great they promote uh certain kinds of

productivity gains and efficiency gains

but let's fix this Baseline first you

want to layer on your belts and whistles

do that but let's get the Bas line fixed

which is we need to have a minimum wage

where we can credibly say as a wealthy

society and the economy this is what

someone should earn to be able to

operate uh as a members of society and

the economy and it's for their dignity y

yeah yeah and that's the outcome the

psychological outcome that's different

yes and that's why their dignity so many

things yeah and some I guess to go back

to our original Point that's where the

wisdom I think comes in that you you

should exercise doses of this

practicality this real world wisdom and

how it'll play out even if you may not

ultimately be that

accurate when you try to formulate

public policy right right I I got a

curious question and I know we're

running out of time but this whole idea

of passion and people um if they pursue

their passion they might find this U

return that means the results go down

which means maybe the the finances go

down a little bit but the return of joy

and other things uh might increase and

you talked about this before this um

what is your view in terms of that like

um should people pursue or should people

just stay with what they have keep going

towards whatever they feel that they

were and just ignore this whole idea of

passion so far be it from me to tell

someone what their purpose in life

should be right everyone's different

yeah everyone's different and just as

important everyone has to find it yes

within themselves now given that you

found it or you think you're you're

iterating toward where you think you

like to be yeah I think that we

shouldn't not that we shouldn't it's

difficult to completely dissociate

ourselves from society but to the extent

that we can we try to not allow the

expectations of soci

Society to overly shape what then we

decide we want to do so the example we

were discussing before the show was what

if you had this job perhaps a

well-paying job perhaps a job that gives

a certain amount of prestige you a

doctor or a

lawyer and you decide no I really really

like baking yeah and I'm miserable all

the time yeah I'm miserable all the time

doing law and dealing with with

belligerent clients and I would very

very much rather bake a chocolate cake

and a really good chocolate cake

and some people make that decision right

sometimes it may turn out to be one that

is remunerative and they end up becoming

even wealthier than if they were to

stick to their original profession but

at other times they may choose something

that and up not being as remunerative

but you have and the level differs for

everyone but you have to ask yourself

yeah maybe I'm happy making this labor

Leisure tradeoff maybe I'm happy earning

just a little bit less but yet finding

it so much more fulfilling what I do

every day I don't exist I live yeah and

I want all of us to agitate toward

living rather than just existing and

then I don't know vesting your dreams on

the Next Generation and putting your

poor kid through your expectations and

try to live vicariously through them no

no they should find their own dreams and

pursue their own passions you you go

find your own yeah I totally resonate

with that and I do feel that this um

there is that standard that you

mentioned that society places and from

usually from your peers and usually it's

from the Facebook groups Facebook

friends that you have is like he this

person this this person okay so then

this is the standard now I'm going to

just template that to my life and okay

I'll just stick to my job and because it

I'm affording That Kind of Lifestyle but

actually in essence maybe you don't even

care about the lifestyle and to be fair

it's tough right it's tough because we

are social creatures we are and

comparison is common in fact I we spoke

about comparison earlier on you want to

compare so that you can Aspire toward

Greater Heights but at the same time

when you're comparing for something you

don't care for that's when you have to

ask yourself am I doing this consciously

or am I just absorbing this and I

think leaving the country as I did for a

number of years and finding myself and

seeing some

possibilities Elsewhere for how Society

can be organized how people can live

lives of meaning and purpose how one can

flourish make me realize that you know

there is a lot more than maximizing per

capita GDP yeah yeah and I know this

sounds heretical as an economist but

there is a lot more than that and so if

we choose to deviate we do have to learn

a little bit how to to insulate

ourselves from these societal

expectations for me

I thankfully I lean a lot on my wife who

it has also been able to look Beyond and

to say that yeah there are sometimes

especially when crisis strikes certain

things that just matter most for us and

for I think many people it's family yeah

and you mentioned you have many kids you

have six kids so yeah so that decision

is also like itself tough yeah and and

yet no no but yeah at the same

time sometimes when crunch time comes

and you are forced to make a decision

and or when you lose something yeah I

don't know you know let's say that knock

on wood there was a scam and you lost

money it sucks and of course you the

money could have been used for much

better purposes and so on so forth but

then you think back what still matters

most in life for

me it's family relationship I still

relationships I still have

them my wife is still with me I still

have my daughter my mom is still with me

the people I care about my sister and as

long as those are still

there then I kind of recalibrate and I'm

like okay yeah the loss sucks but then I

can move on so I think the anchor is

really important to help us sometimes to

dissociate from societal pressures and

inevitable Facebook or whatever like you

say WhatsApp chats

that sometimes subtly or not so subtly

you try to compare yes yes yes okay La

last question jamus um as a I love life

hacks right and I just want to find out

from you as Economist what would be one

life hack that you kind of like you

think that okay I think this is going to

benefit a lot of people so here's the

textbook answer right but I think it's a

textbook answer that's actually very

profound okay so economists believe in

this uh the principle of opportunity

cost is not just we believe we we

consistently teach our our undergraduate

and try to get them to think in this

manner so the idea of opportunity cost

is what was the next best thing that you

had to forgo in order to do the thing

that you chose so why that's useful just

at a surface levels at least it forces

you to think about trade-offs right what

did you give up uh and what in in order

to get what you did

and by thinking that way at least you

convince yourself that your choice was

correct because you consciously chose to

do this rather than the other thing so

hopefully if by thinking it through you

realize actually I rather do the other

thing then you just switch over and you

do the other thing instead but it's also

more

General if you're trying to make big

decisions in

life like what we were talking about

deciding to give up a job or career for

something else you can weigh it all down

as a matter of what is the thing that

you're giving up in order to pursue this

thing

and perhaps you come to realize that the

thing that you are giving up just isn't

worth that much to you and what really

matters a lot more is this other thing

then absolutely use switch because that

is

how you will constantly I hate to use

this word because we were just talking

about how we shouldn't do this but

that's how you reoptimize your life

toward just importantly not just

monetary but also non-pecuniary factors

things that matter the most to you and

that it's not for me to say what it is

for you but at the very least going

through the exercise of opportunity cost

and and weighing those out those options

out helps you to systematically make

decisions in a way that hopefully

minimizes regrets great I I I I I when I

think about this I think about um a

framework I have in life uh where there

are four basic um areas where any

everybody kind of like focuses on first

one is your health relationship wealth

and joy so there these four areas where

we have a finite number of almost like

um finite number of coins where we can

actually Place into these if you place a

lot of emphasis on your wealth then

maybe your relationships your joy and

then your health suffers so it's it's

about having a finite number of coins

where you can place into it and where do

you want to invest and that this

opportunity cost means that there is

that finite number if you keep going to

your wealth and then you have zero Joy

at work is that what you really want or

you can have some joy and then have less

finances but you're really happy because

you have more time with your family and

all that and the opportunity cost

absolutely thank you so much James for

this time and I am so glad that you're

here sharing with everybody about your

passion about being an economist and

contining serving the nation with all

that skill set so thank you so much that

was my pleasure

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