Relative efficacy of exchange rate policy and wage policy in Singapore.

Abstract

The paper examines empirically the impacts of wage policy and exchange rate policy on unemployment in Singapore. The empirical results reflect that a strong relationship with unemployment rates exist for both real wages and real effective exchange rates. Our findings lend empirical support to the notion that both wage policy and exchange rate policy are effective tools to use in countering unemployment in Singapore. A better understanding of exchange rate policy and wage policy will be beneficial to Singapore’s policy makers.