Welcome Remarks By Mr Edward S. Robinson, Deputy Managing Director (Economic Policy) & Chief Economist, Monetary Authority Of Singapore, And Member Of The ABFER Council At The 13th Asian Monetary Policy Forum On 22 May 2026

Good morning.

 Distinguished speakers & guests.

 Introduction

1.  Thank you for taking the time to be here for the 13^th Asian Monetary Policy Forum. The global economy has been hit by a disconcerting sequence of geopolitical, trade, technology, and energy shocks, stress-testing the policy responses of governments and central banks. Amid the current challenges, it is prudent to reassess the foundations of economic resilience, the value of mutually advantageous trade relationships, and strategies for sustainable long-term growth.

Resilience Amid Growing Vulnerabilities

2.  Despite the Liberation Day tariffs, the much-feared collapse in global trade has so far largely failed to materialise; the dog that did not bark[1] in 2025. Trade shocks have not reduced overall trade. Instead, regional exports have strengthened, and aggregate demand has remained resilient.

3.  Starting from an imperfect but generally freer global trade equilibrium, US tariffs have had both trade-diverting and trade-creating effects. They have pushed sourcing to alternative partners in Asia, bringing about less a uniform decline of trade than a re-routing of goods through regional supply chains, and inducing a deepening of regional production networks. In fact, the incoming data from last year suggests trade flows among other (US-minus) trading nations have picked up[2]. Further, ASEAN’s trade with every major region increased, with total manufactured exports growing by nearly 14%.[3]

4.  Yet we should not assume that trade shocks have really been muzzled. Nor that current resilience in production and exports will endure. The broader orthodox economic view of the damaging effects of tariffs remains relevant.

5.  Tariffs have raised US inflation and – given uncertainty about their eventual levels – further inflationary pressures may be on the horizon. As it is, an estimated 90% of the tariff increase on US imports last year was borne domestically by US firms and consumers.[4] Further tariff rate increases, or even the exhaustion of stockpiled imports, may push prices even higher.

6.  Beyond immediate price effects, tariffs generate systemic efficiency losses by distorting sourcing toward less efficient suppliers and redirecting resources to uncompetitive sectors. Supply chain disruptions compound these problems by elevating logistics costs and ultimately reducing economy-wide productivity. Tariffs on intermediate inputs also cascade through the supply chain, with higher upstream costs passed through at each downstream stage. These are augmented Vinerian trade diversion costs.[5]

7.  We should also consider that the rerouting of trade may have some negative effects on smaller regional economies. As goods displaced from the US market seek new destinations, third-country producers may find themselves undercut in their home markets. The aggregate trade picture may look healthy, but specific industries face rapid surges of import competition, with knock-on effects on relative prices and labour markets. Although these shocks will diminish over time as production and supply chains adjust, short- and medium-term localised dislocations could be material with their attendant economic and social costs. And, beyond these effects, import taxes and other non-tariffs barriers impose long-run costs by impeding cross-border collaboration and innovation, thereby constraining productivity growth and slowing economic convergence.

8.  Another structural challenge from tariffs is identified in modelling work by Warwick McKibbin of the PIIE, who shows that to the extent that tariffs shift economies towards autarky and away from rules-based order, they also reduce economic security by weakening the buffer that a diversified network of trading partners would otherwise provide.[6] As an illustration, where output in manufacturing industries in the US was strong in 2025, so were imports. Where production was down, so were imports. Rather than weakening domestic manufacturing and undermining economic security, trade supports both.[7]

9.  While trade and tariffs have dominated discussions for more than a year, it is the oil shock from the Middle East conflict that is now preoccupying governments and central banks. A persistent supply shock to the global economy from the Gulf conflict has generated a complex mix of inflation, financial, and growth impulses which will yet again test the resolve of small open economies. Many Asian countries, generally large energy importers, are also faced with disproportionately heavy burdens of adjustment to oil shocks. Heightened vigilance over fiscal and financial stability risks are called for. And as Philip Lane has recently emphasised, the central question for central banks is whether indirect and second-round effects are taking hold, a risk that is amplified in small open economies, where energy costs pass through to wages and other prices more quickly.[8]

10.  Previous crises have shown that macroeconomic demand management policies are not particularly well-suited to handling oil shocks. Supply-side policies aimed at reducing vulnerabilities have an important role to play. Several governments, aware that energy price shocks can unleash a broader inflationary dynamic, have sought to secure crucial energy supplies in advance. At the same time, policymakers should be wary of proposed approaches that aggravate rather than soothe underlying strains. Energy exporters, faced with spot shortfalls, may be tempted to impose export curbs, thereby worsening global supply conditions and amplifying the harmful wave of protectionism already underway. But one positive lesson from this conflagration should be obvious, which is that we can no longer be distracted from the long-term need to build up resilience in renewable sources of energy.

11.  Beyond trade and energy shocks, there is what Schumpeter described as a “discrete rush”[9] of innovation. Developments in AI and related fields do not proceed smoothly or evenly over time, but instead occur in energetic bursts, as major innovations trigger waves of investment, followed by surges in growth. As innovation driven by new technologies tends to proceed with variable lags, the full supply-side productivity gains from AI will not materialise for some time. Indeed, so far, GDP growth appears to have been supported more by capital spending than by broad-based labour augmenting gains in productivity.  Finance bridges the time gap but carries with it its own vulnerabilities as we have seen in the jitters in private credit.

Navigating This Juncture

12.  To cope with this trifecta of tariff, geopolitical, and technology shocks simultaneously we must refresh our approach to growth, economic management, and governance. Forums such as this assemble central bankers, academics, business leaders, and private-sector analysts to examine these overlapping challenges. Over the course of the Forum, we will tackle four critical issues:

13.  First, Philip Lane will take us through the evolution of Europe’s position in the global economy and how this has been affected by structural shifts elsewhere in the world. 

14.  Second, Eswar Prasad will present the commissioned paper on the disruptive challenges facing the international monetary system, with commentaries by Barry Eichengreen and Danny Quah. Together, this formidable trio will continue the quest for a sufficiently elastic international currency amid the resurgence of geopolitical factors and the emergence of digital currencies. Yet another formidable and prolific researcher, Sumit Agarwal, will chair this session. 

15.  Third, Douglas Irwin will unpack the political economy of trade policy. He will show us that any serious effort to understand the motivations behind modern policy decisions requires an appreciation of the historical provocations that have shaped them.

16.  Finally, our afternoon panel comprising Amit Seru, Ross Levine, Wenxin Du, and Viral Acharya will discuss the financial stability implications of these undercurrents. Between the rise in borrowing costs, broader market repricing, and widening of credit spreads that have accompanied the oil shock, this is sure to be an engaging and timely discussion. 

Conclusion

17.  I will conclude. At times it may have appeared that central banks could operate without regard to the political context - this was probably never the case in reality, and it is certainly not so now.[10] To maintain their independence, central banks need to protect and solidify their reputations as technically competent, impartial assessors of economic and financial developments. As a leading platform to facilitate industry-academic exchanges, the AMPF is a means to secure that distinct central bank reputation and credibility as we serve the public service role entrusted to us in these vexing times. 

18.  Fortunately, we can rely upon a stellar international cast at this Forum. To kick off our programme, we are honoured to have as our speaker Philip Lane, Chief Economist and board member of the European Central Bank, former Governor of the Bank of Ireland, and Professor at Trinity College. Professor Lane has been a leading figure in the development and diffusion of the new, microfounded, open economy macroeconomics.[11] His impressive list of contributions to macroeconomics includes highly innovative and influential work on global economic integration, and on the role of cross-border asset positions and balance sheet effects in determining short-term flows, exchange rate movements, and long-run growth.[12] This, of course, has been an area of particular relevance to Singapore, where Professor Lane’s clear and comprehensible approach to laying out macroeconomic complexities has long been appreciated. Professor Lane visited the MAS in 2013, sharing with us the benefits of his learning and experience as an academic. Some 13 years later we are honoured to have him back as central banker to open the 13^th Asian Monetary Policy Forum. 

19.  May I invite Philip Lane to deliver his opening address, please.

***

1. [1] The phrase comes from Conan Doyle’s 1892 Sherlock Holmes story “Silver Blaze”, where a dog’s failure to bark reveals that the intruder was someone familiar. It has since been used to refer to an expected event that does not occur. It was also invoked by the IMF (2013) to describe unexpectedly stable inflation post-Great Recession. IMF (2013), “Chapter 3: The Dog That Didn’t Bark: Has Inflation Been Muzzled or Was it Just Sleeping?” in World Economic Outlook: Hopes, Realities, Risks, International Monetary Fund, April.

 

1. [2] Economist (2026), “Liberation Day” has reshaped trade – but not as Donald Trump hoped, The Economist, 1 April.

 

1. [3] Devesa, Tiago et al. (2026), “Geopolitics and the geometry of global trade: 2026 update: Tariff splashes, AI waves, and the ripples reshaping global trade”, McKinsey Global Institute, March.

 

1. [4] Amiti, Mary., Chris Flanagan., Sebastian Heise., and David E. Weinstein (2026), “Who Is Paying for the 2025 U.S. Tariffs?”, Federal Reserve Bank of New York, February 12. https://libertystreeteconomics.newyorkfed.org/2026/02/who-is-paying-for-the-2025-u-s-tariffs  /

 

1. [5] Jacob Viner first established the trade creation versus trade diversion framework in his seminal 1950 work. He argued that preferential liberalisation can generate welfare losses when it leads to trade diversion. This refers to the shift of imports from lower-cost external suppliers to higher-cost preferential partners. Viner, Jacob (1950), The Customs Union Issue, Carnegie Endowment for International Peace. In recent work, Sebnem Kalemli-Ozcan and co-authors show that input costs hikes from tariffs can propagate through production networks, affecting downstream prices over time leading to reduced output and measured productivity. Kalemli-Ozcan, Sabnem et al (2026), “Macroeconomics of tariffs with global production and finance networks”, VoxEU, 18 May.

 

1. [6] McKibbin, Warwick J., Marcus Noland., and Geoffrey Shuetrim (2025), “The Global Economic Effects of Trump’s 2025 Tariffs”, PIIE Working Paper 25-13, June.

 

1. [7] Ip, Greg (2026), “America Is in the Middle of a Stealth Manufacturing Boom: Factory jobs are down, but factory output has risen briskly. Credit goes not to tariffs, but to the most basic economic force of all: demand”, The Wall Street Journal, 18 April 2026. https://www.wsj.com/economy/america-is-in-the-middle-of-a-stealth-manufacturing-boom-af0702af?msockid=20e6a8a8f4266d4814bcbe0ef5af6cb2 

 

1. [8] Lane, Philip R. (2026), “Speech: Analytical perspectives on energy supply shocks”, European Central Bank, May 13. https://www.ecb.europa.eu/press/key/date/2026/html/ecb.sp260513~5b14c78806.en.html 

 

1. [9] Schumpeter, Joseph A. (2008), Capitalism, Socialism and Democracy (3rd Edition), Harper Perennial. (Original work published in 1942).

 

1. [10] Moschella, Manuela (2024), Unexpected Revolutionaries: How Central Banks Made and Unmade Economic Orthodoxy, Cornell University Press.

 

1. [11] Lane, Philip R. (2001), “The new open economy macroeconomics: a survey”, Journal of International Economics, 54(2), 235-266.

 

1. [12] Lane, Philip R., and Gian Maria Milesi-Ferretti (2005), “Financial Globalization and Exchange Rates”, IMF Working Paper No. WP/05/3, January.