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Global Economy

The ebbs and flows of global economic conditions, trade and capital flows, thus have substantial implications for the Australian economy, and Australia’s major regional trading partners. Understanding the broad trends, and identifying emerging challenges and opportunities within the global economy, is central to the work of the International Economy Program at the Lowy Institute.

The highly integrated nature of the modern global economy became especially evident during the 2008 global financial crisis. What began as a localised problem within the residential asset-backed securities market in the United States, eventually brought down major financial firms across the Western world, and ultimately pushed the United States and Europe into a deep and prolonged recession. Although global economic growth has recovered somewhat since 2008, it is still much lower than pre-2008 trends, and the hangover from the crisis has manifested itself in the form of high unemployment levels throughout much of the developed and developing world, as well as an increasing level of inequality both within and between countries.

Understanding the economic rise of Asia, and particularly of the growing middle class within Asia, is also crucial to the broader work of the Lowy Institute. Political economy analysis on major players in the region, chiefly China, India and Indonesia, features heavily in the work of the East Asia Program and the International Security Program.  

Interview: Danny Russel on the status of the US rebalance

Daniel (Danny) Russel is US Assistant Secretary of State for East Asian and Pacific Affairs, which means he is the State Department's senior Asia diplomat (he succeeded Kurt Campbell in the role). Russel traveled with his boss John Kerry to Jakarta early this week and then made a quick visit to

The Australian economy: How does it compare?

The meeting of the G20 finance ministers and central bank governors in Sydney next weekend provides an excuse to turn the spotlight inwards, towards the domestic economy. The IMF begins its new report on Australia this way: The Australian economy has performed well relative to many other

Adam Minter on the Junkyard Planet (part 4)

Here's part 1 of my interview with author Adam Minter (on the globalisation of the scrap and recycling industry), part 2 on China's role in this industry, and part 3 on India. In this last instalment, I ask Adam about junk and environmentalism: PB: To finish, let's turn to the future. What do you

Adam Minter on the Junkyard Planet (part 3)

Here's part 1 of my interview with author Adam Minter (on the globalisation of the scrap and recycling industry) and part 2 on China's role in this industry. In part 3 we look at India: PB: Your reference to India reminds me of one of the sections in your book that I found most interesting (and

Global cooperation among G20 countries: responding to the crisis and restoring growth

At the outbreak of the global financial crisis, 2008, the G20 was widely acknowledged as helping prevent an even more serious decline in the global economy. It helped to calm the panic in financial markets and articulate a set of possible policy options to restore global stability and growth.

Adam Minter on the Junkyard Planet (part 2)

In part 1 of my interview with Junkyard Planet author Adam Minter, he talked about the removal of one 'pin' in the global recycling economy during the global financial crisis, which brought the entire industry to a temporary halt. Here's my second question to Adam. PB: China itself is one of the

Interview: Adam Minter on the Junkyard Planet

Journalist Adam Minter has written a fascinating account of the global rubbish and recycling industry. I recommended his book, Junkyard Planet, as one of my top 'development books' of 2013. Here is part 1 of an interview I am conducting with Adam via email, and below the text a couple of captioned

Hockey's speech and global monetary-policy spillover

In his speech at the Lowy Institute last week, Australian Treasurer Joe Hockey made a clear case for international policy coordination: 'in a globalised world every policy action taken in isolation has a spillover'. Specifically, this month's G20 meeting of finance ministers and central bank

Astonishing progress in robotics

A few links illustrating how this is going to change people's lives and change whole economies, not just because robots are getting better but because they are getting cheaper. Exhibit 1 is a machine called Baxter. Here's an extract from a new book, The Second Machine Age, which explains the

What can be done about income inequality?

The income-inequality debate is an old one, but it’s getting renewed interest, most recently from President Obama in his State of the Union address, where he advocated raising the minimum hourly wage from $7.25 to just over $10. He also spoke of the closely related issue of social mobility (a '

Tony Abbott's G20 vision at Davos: It's a start

On 23 February Prime Minister Abbott delivered a much anticipated speech to World Economic Forum at Davos outlining Australia's vision for the G20. The immediate response on Twitter was largely negative.  Chris Giles from the Financial Times tweeted: 'sign of the times, Rouhani (President of Iran

Reader riposte: N enrichment in Australia and beyond

Richard Broinowski writes: In his speculative piece on a regional uranium enrichment plant in Australia, John Carlson gets a few things wrong. First, it is inaccurate to suggest that but for Labor's opposition, Australia might now be well on the way to establishing a uranium enrichment facility.

A mug's game: Forecasting China's economic future

Forecasting is a mug's game, but we can't resist. Economists usually take a stab at the central growth forecast and then add a shopping-list of things that might go wrong. If you enumerate enough risks, there are built-in excuses when the central forecast doesn't happen. Inscrutable China provides

A regional uranium enrichment centre in Australia?

It may seem anomalous that Australia, with a third of the world's uranium reserves, does not have a uranium enrichment industry to value-add on uranium exports.  This was seriously considered in the 1970s, when a consortium of four major Australian resource companies conducted an enrichment

International economy: What's in store for 2014?

Let's start with the global economic outlook. A common view is that advanced economies are at last on the mend and will take over the running from the emerging economies, which have provided much of world growth since 2008. The US and the UK seem likely to do better this year, because both are

Australia takes the G20 chair: Now what?

The starter's gun has fired on Australia's G20 presidency. It was a low key start. The Prime Minister's media release was very brief. This is a positive. The G20 should always be business-like, with the focus on achieving substantive outcomes rather than on the event itself. Start to worry if we

Thoughts from the 'father of the G20'

Mike Callaghan is Director of the Lowy Institute's G20 Studies Centre. Former Canadian Prime Minister Paul Martin is often referred to as 'the father of the G20’. While Canada’s finance minister, he was the driving force behind the establishment of the G20 and was selected by the G7 in 1999 to

The clock is ticking on G20 preparations

In this op-ed for the Australian Financial Review, Director of the G20 Studies Centre, Mike Callaghan, discusses the essential steps the government should take in chairing the G20, including authoring a concept paper and encouraging leader engagement

Playbook for the Brisbane G20 summit

Australia will chair the G20 for 12 months from 1 December 2013. It will be the largest international economic meeting ever held in Australia. This paper outlines the strategy, priorities and steps required for the Brisbane G20 summit to be a success – it is a ‘playbook’ for

US shutdown just the latest G20 headache

Mike Callaghan is Director of the Lowy Institute's G20 Studies Centre. When G20 finance ministers meet in Washington, DC at the IMF Annual Meetings on 10-11 October, there will much  to discuss and worry about. A glance at the headlines identifies many of the issues that should be on their minds

The election's G20 factor

One of the more unanticipated explanations for the Rudd government’s delay in announcing the date of election 2013 is the need to factor in the G20 leaders’ summit on September 5-6 in St Petersburg. 

If the G20 is so great, why isn't Rudd going?

Hugh Jorgensen is a Research Associate in the Lowy Institute's G20 Studies Centre. It took me three years of work to get us into the G20. We are hosting it next year. To have this jammed up against a federal election date is a problem and if I can overcome that problem I will. — Kevin

G20 needs to ask the big questions

In an opinion piece for The Australian Financial Review, Director of the G20 Studies Centre, Mike Callaghan, writes about the current state of international financial regulation, and the contribution Australia can make in this area when it chairs the G20 in 2014

G20 on tax avoidance: Talk or action?

Mike Callaghan is Director of the Lowy Institute's G20 Studies Centre. There were reports prior to the G20 finance ministers' meeting in Moscow on 19-20 July that, while G20 gatherings do not always set the pulse racing, this gathering had a better chance than most of grabbing the attention of

G20: Rudd should go because it's important

Mike Callaghan is Director of the Lowy Institute's G20 Studies Centre. The G20 Leaders' summit in St Petersburg on 5-6 September 2013 continues to be a factor influencing the timing of the Australian federal election. But it says something about the status of the G20 when commentators argue that

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