Year of the Blue Horse: Time to Assess Policy Signals Driving the Economy

The economy is always cited as the top priority of state affairs whenever a new year begins. Growth, jobs, and the recovery of people’s livelihoods are unavoidable tasks for any government. Since taking office, the current administration has likewise emphasized the role of the market and businesses.

This stance sends an important directional signal to economic actors. However, the economy responds more sensitively to the overall flow created by policy than to declarations. The wider the gap between words and policy, the more inevitably market confidence will be shaken.

Policy is not judged by the intent of each individual bill. Businesses and markets assess the environment created by multiple systems and regulations as a whole. As regulations accumulate, the pace of institutional change quickens, and ex post liability expands, decision-making becomes more conservative. Investment and hiring are made on the basis of the stability of the long-term institutional environment. That is why policy consistency and predictability matter.

The Working Hours Limit Act, the Serious Accidents Punishment Act, and the Yellow Envelope Act (Revised Labor Commission Act) are already bringing significant changes to the decision-making environment for markets and businesses. Those changes extend to the use of technology, employment, and even the structure of responsibility at industrial worksites. The issue is not the intent of the laws, but how these changes are received in the field—as signals of cost and risk. Policy discussions should begin precisely at this point.

In legislation dealing with labor and safety, the importance of policy signals is especially great. The less clear the scope of responsibility and the standards of judgment, the more sensitively the field reacts to uncertainty. Businesses then make decisions in ways that avoid risk, which is highly likely to lead to reduced hiring and investment.

For a system to produce its intended effects, policymakers must also consider what choices it induces in practice. The success or failure of a policy depends on what judgments it leads people to make on the ground.

In emerging technology sectors such as AI, the speed and flexibility of policy determine competitiveness. The faster technological change proceeds, the clearer the institutional framework must be. If standards are ambiguous or rules become rigid, companies will delay investment, while talent and capital will move to more flexible environments.

The more intense global competition is in a given field, the more a single policy signal can determine the direction of the industry. The more a system deals with technology, the more carefully it must be designed. In other words, the Framework Act on AI must not produce government-led rigidity.

What matters now is reviewing how and how quickly policy is conveyed to the market. When multiple regulations are pursued at the same time, the market first perceives the cumulative burden, regardless of the content of each individual system. In this process, signals may be distorted contrary to the policy’s intent. Even to preserve the purpose of the system, priorities among policies and the process of coordinating them become all the more important.

This is not an issue to be judged by whether any single bill is right or wrong. What matters is the overall directional signal the government is sending. The market interprets the government’s intent through the cumulative effects of its institutions. If a pro-market stance is to be maintained, that direction must be shown consistently in individual policies as well. That is why harmony among policies and careful pacing are necessary.

At the start of the new year, the government’s attitude toward the market is more important than ever. If there is a genuine commitment to reviving the economy, that commitment must be read as a consistent message across the full range of policies.

Allowing room for the market to move on its own—so that prices and cost adjustments work before regulation does—is the path to making the economy move. I hope the current administration will maintain its market-friendly stance and continue to manage major issues in a balanced manner.

Sung-no Choi, President, Center for Free Enterprise (CFE)

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Original title: 병오년 새해, 경제를 움직이는 정책 신호를 점검할 때다

Author: Sung-no Choi

Date: 2026-01-05

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&idx=28465