Results (from publications and newsroom)
(Search Again)
19 Apr 2010 - Publication
The evolving post-crisis world
In a new paper written as background for the current Asian Development Bank Economic Outlook, Dr Stephen Grenville notes that Asia has come through the Global Financial Crisis well, with Chinese and Indian growth hardly slowing, and quick recoveries in those countries which were adversely affected. Looking forward, the global environment will be less benign, with developed countries constrained by continuing external imbalances, big fiscal deficits and ongoing balance sheet problems. For East and South Asia, excessive capital inflows present an important policy challenge.
Dr Stephen Grenville AO
4 Nov 2009 - Publication
The global financial crisis: causes and consequences
This Working Paper, by Warwick McKibbin and Andrew Stoeckel, models the global financial crisis as a combination of shocks to global housing markets and sharp increases in risk premia of firms, households and international investors in an intertemporal (or DSGE) global model. The model has six sectors of production and trade in 15 major economies and regions. The paper shows that the shocks observed in financial markets can be used to generate the severe economic contraction in global trade and production currently being experienced in 2009.
The results show that the future of the global economy depends critically on whether the shocks to risk are expected to be permanent or temporary.
Professor Warwick McKibbin
16 Feb 2009 - Publication
The economic and environmental effects of border tax adjustments for climate change policy
For the foreseeable future, climate change policy will be considerably more stringent in some countries than in others. In high-cost countries, there will be political pressure to impose border adjustments, or 'green tariffs', on imports from countries with little or no climate policy and low energy costs. In this paper, the authors estimate how large such border tax adjustment tariffs would be in practice, and then examine their economic and environmental effects using G-Cubed, a detailed multi-sector, multi-country model of the world economy. They find that the tariffs would be small on most traded goods, would reduce leakage of emissions reduction very modestly, and would do little to protect import-competing industries. They conclude that the benefits produced by border adjustments would be too small to justify their administrative complexity or their deleterious effects on international trade.
Professor Warwick McKibbin Peter J. Wilcoxen
27 Oct 2008 - Publication
Expecting the unexpected
To estimate the emissions reductions and costs of a climate policy, analysts usually compare a policy scenario with a baseline scenario of future economic conditions without the policy. Both scenarios require assumptions about the future course of numerous factors such as population growth, technical change, and non-climate policies like taxes. The results are only reliable to the extent that the future turns out to be reasonably close to the assumptions that went into the model.
In this Working Paper the authors examine the effects of unanticipated macroeconomic shocks to growth in developing countries or a global financial crisis on the performance of three climate policy regimes: a globally-harmonised carbon tax; a global cap and trade system; and the McKibbin-Wilcoxen hybrid.
Professor Warwick McKibbin Adele Morris Peter J. Wilcoxen
3 Jul 2008 - Publication
Building on Kyoto: towards a realistic global climate agreement
Although the Kyoto Protocol has not been effective at reducing emissions, it has been very effective at demonstrating a few important lessons about the form future international climate agreements should take. As negotiations begin in earnest on a successor agreement to take effect in 2012, it is important to learn from experience with the Kyoto Protocol in order to avoid making the same mistakes over again and to design a more durable post-2012 international agreement. This paper presents the lesson learnt from the Kyoto Protocol and proposes a way forward for the post- Kyoto negotiations. It also offers some empirical results for the global consequences of a cap and trade emissions markets, a global carbon tax and the McKibbin Wilcoxen Hybrid emissions market approach.
Professor Warwick McKibbin Peter J. Wilcoxen
3 Jul 2008 - Publication
China can grow and still help prevent the tragedy of the carbon dioxide commons
Under reasonable assumptions, China could achieve parity in living standard with Western Europe by 2100, and India by 2150. Climate change, however, may be a key obstacle preventing such a convergence. This paper uses a dynamic multi-country model (the G-Cubed Model) to project a realistic BAU trajectory of CO2 emissions for China, and we find it to be even above the CO2 emissions from the high-growth scenario estimated by the Energy Information Agency in 2007. This outcome is a reminder that it has been usual so far to underestimate the growth in China energy consumption. The paper then compares the merits of the different market-based CO2 reduction mechanisms in China like a carbon tax, a cap-and-trade emissions trading scheme, and the McKibbin-Wilcoxen Hybrid (MWH) emissions trading approach.
Professor Warwick McKibbin Peter J. Wilcoxen Wing Thye Woo
23 May 2008 - Publication
What does a free-trade area of the Asia-Pacific mean to China
A Free Trade Area of the Asia-Pacific (FTAAP) has been proposed as a long-term prospect by the Asia-Pacific Economic Cooperation (APEC). This Working Paper by Tingsong Jiang and Warwick McKibbin examines the impact of the FTAAP on the national and regional economies in China using a suite of general equilibrium models: APG-Cubed, a dynamic global model; GTAP, a static global model; and CERD, a static China model with regional dimension.
Professor Warwick McKibbin Tingsong Jiang
15 Feb 2008 - Publication
Central banks and capital flows
Sudden capital outflows were at the heart of the 1997-8 Asian Crisis. Ten years later, capital flows are back on the policy agenda, but in a very different context. The countries of East Asia are now getting more inflows than they can effectively absorb and the upward pressure on exchange rates is unwelcome.
These issues are discussed in this paper, 'Central banks and capital flows', by Dr Stephen Grenville, in the Lowy Institute's Working Paper in International Economics series.
Dr Stephen Grenville AO
12 Apr 2007 - Publication
Two issues in carbon pricing: timing and competitiveness
This Working Paper in International Economics by David Pearce and Warwick McKibbin explores two issues that have emerged in recent policy discussions on the need for price signals to encourage efficient abatement of greenhouse gases.
The first is the question of the timing of a price signal, in particular whether the signal should be introduced 'early', or whether it would be more appropriate to first subsidise R&D — and so lower the cost of abatement — before introducing a price signal. The second question is whether, and how, Australia could 'compensate' for trade effects (or a loss of 'competitiveness' that could be experienced by particular industries) if Australia did introduce a significant carbon price signal before such a signal was introduced by our trading partners.
Professor Warwick McKibbin David Pearce
31 Oct 2006 - Publication
Recent Lowy Institute publications on the global environment
The British Government’s release of the Stern Review on the Economics of Climate Change has again sharply focused public attention on the global environment. Several significant recent Lowy Institute reports - on the economics of climate change, the link between security and the environment, the environmental consequences of China's energy consumption, and public opinion on climate change in Australia - have contributed to that debate and can be accessed here.
4 Oct 2006 - Publication
Domestic investment and external imbalances in East Asia
Since the 1997-98 Asian crisis, the investment decline in East Asia, outside of China, combined with the falling in public and private savings in the United States, has contributed to the surge in global current account imbalances. Using a global simulation model, this paper explores the nature of policies and shocks that might reduce these imbalances: policies to raise domestic investment in East Asia; structural reforms in the corporate and financial sectors that lower financial risk and improve investment efficiency in East Asia; a significant fiscal consolidation in the United States; and a substantial decline in the housing market in the United States.
Professor Warwick McKibbin
27 Jun 2006 - Publication
A credible foundation for long term international cooperation on climate change
In this new Working Paper in International Economics, the Lowy Institute's Professor Warwick McKibbin and Peter Wilcoxen write that to succeed in reducing carbon dioxide emissions, a climate policy must establish credible long term incentives for investments in new energy sector capital and in research and development.
The authors argue that credibility implies that international agreements should focus on enhancing coordination and collaboration between countries, rather than on coercion. At the national level, credibility requires political and economic incentives that can be provided by long term tradable emissions permits, but it needs more flexibility than can be provided by a conventional permit system. They argue that the best mechanism for providing credible long term incentives is a hybrid system of long and short term emissions permits.
Professor Warwick McKibbin Peter J. Wilcoxen
16 Dec 2005 - Publication
Environmental consequences of rising energy use in China
The emergence of China as an economic power has important implications for energy use and environmental outcomes at the local, regional and global levels. China is currently the world's third largest energy producer and the second largest energy consumer. Although China has for several decades started to address environmental problems, the focus on energy as a source of economic growth has dominated the energy debate in China. This is beginning to change as income levels in China make the environment a more important issue and as environmental quality continues to deteriorate.
This paper gives an overview of the environmental consequences of energy use in China with a focus on what responses might alleviate current and future problems.
Working Paper in International Economics, No. 8.05, by Professor Warwick McKibbin.
Professor Warwick McKibbin
4 Nov 2005 - Publication
The global macroeconomic consequences of a demographic transition
The world is in the midst of a significant demographic transition with important implications for the macroeconomic performance of the global economy. This paper summarises the key features of the current and projected future demographic changes that are likely to have macroeconomic effects. It then applies a new ten region global model (an extended version of the MSG-Cubed model) incorporating demographic dynamics, to examine the consequences of projected global demographic change on the world economy from 2005 to 2050. A distinction is made between the effects on each country/region of its own demographic transition and the effects on each country/region of the equally large demographic changes occurring in the rest of the world. It is estimated that the macroeconomic consequences of demographic change over coming decades are large for the world as a whole. For each country both domestic and foreign demographic changes are important.
Professor Warwick McKibbin
22 Aug 2005 - Publication
The global impact of demographic change
This paper examines the implications of the major demographic transition currently under way and over the next 80 years for Japan, the United States, the rest of the OECD, and developing regions. The impact on the world economy is evaluated using a dynamic intertemporal general equilibrium four-country model containing demographics calibrated to the "medium variant" of the United Nations population projections. We find that population aging in industrial countries will reduce aggregate growth in these regions over time, but should boost growth in developing countries over the next 20–30 years, as the relative size of their working-age population increases. Demographic change will also affect saving, investment, and capital flows implying changes in global trade balances and asset prices. We also explore the sensitivity of the results to assumptions about future productivity growth and country risk for the developing country region.
Professor Warwick McKibbin
14 Jun 2005 - Publication
Global demographic change and Japanese macroeconomic performance
The world is in the midst of a significant demographic transition with important implications for the macroeconomic performance of the global economy. This paper summarises the key features of the current and projected future demographic changes that are likely to have macroeconomic effects. It then explores the implications of global demographic change on recent Japanese macroeconomic performance as well as projected performance over the remainder of this century. A distinction is made between the effects on Japan of demographic change that occurs in Japan and the effects on Japan of the equally large demographic changes occurring in the rest of the world.
Professor Warwick McKibbin
31 May 2005 - Publication
Financial liberalization, financial sector development and growth: evidence from Malaysia
The objective of this paper is to examine whether financial development leads to economic growth or vice versa in the small, open economy of Malaysia. We argue that the results obtained from cross-sectional studies are not able to address this issue satisfactorily and highlight the importance of country specific studies. Using time series data from 1960 to 2001, we conduct cointegration and various causality tests to assess the finance-growth link by taking saving, investment, trade and real interest rate into account. Contrary to the conventional findings, our results support the view that output growth causes financial depth in the long-run.
Professor Warwick McKibbin
25 May 2005 - Publication
Convergence and per capita carbon emissions
In a new Working Paper in International Economics, Professor Warwick McKibbin and Alison Stegman write that assumptions about carbon emissions per person lie behind many future climate projections as well as being the basis of a number of policy proposals. This paper examines the historical behavior of emissions per capita and explores whether there is any evidence of convergence of emissions per capita across countries over time or convergence in the determinant of these emissions. We find no evidence of convergence in any of these ratios - a critical determinant of carbon emissions is natural endowments of fossil fuels per country which are not easily changed . Given this evidence, it is likely that future climate projections that are based on an assumption of convergence of either emissions per capita, emission intensities of energy or energy intensities of GDP are not very useful given they are not based on historical experience.
Professor Warwick McKibbin
2 Mar 2005 - Publication
Asset markets and financial flows in general equilibrium models
This paper discusses the importance of asset markets and financial flows in general equilibrium models. Asset markets and financial flows play an important role in the adjustment process to economic shocks and policy changes. It is argued that if asset markets are not integrated into economic models, the dynamic story of adjustment will be incomplete and the usefulness of modelling results for a variety of applications will be limited. This paper provides a general outline of the MSG and G-Cubed approaches focusing on the role of asset markets and financial flows. These models have been used extensively over the past two decades to analyse the impact of various economic shocks and policy adjustments globally. A range of studies where the models have provided interesting and important insights are summarised and the key role of asset markets and financial flows in the adjustment process is highlighted.
Professor Warwick McKibbin
28 Feb 2005 - Publication
Indonesia in a changing global environment
Indonesia faces a number of important challenges both in the short run and in the longer run. The world economy is currently growing robustly but a number of uncertainties cloud the economic outlook. A strong global economy is being challenged by higher oil prices. The emergence of significant trade imbalances between East Asia and the United States will undoubtedly put pressure of economic and political relations between the major regions of global growth. At the same time that the global economy is providing short term economic stimulus to Indonesia, there are a number of serious environmental problems that Indonesia needs to face. Key among these is depletion of natural resources, particularly the degradation of forests, and rising greenhouse gas emissions. As a major fossil fuel producer, global policies to reduce greenhouse gas emissions will impact directly on Indonesia. This paper explores these issues in assessing the outlook for Indonesia in coming years.
Professor Warwick McKibbin
12 May 2004 - Publication
Modelling global demographic change: results for Japan
In earlier papers, we introduced demographic features into the MSG3 model of the world economy, following the approach of Bryant and McKibbin. In this paper we use the same theoretical technique to develop a series of models based on a consistent database from a simple two country symmetric theoretical model to the complete four country MSG3 model, which represents the empirical characteristics of Japan, United States, rest of OECD and Rest of World.
Professor Warwick McKibbin
7 May 2004 - Publication
Climate change policy for India
While the global environment waits for the world to reach some form of agreement on climate policy, developing countries such as India are entering a phase of higher economic growth. The decisions on investment in energy systems that will be made in India in coming years will have an important impact on global climate change over the coming century.
This paper explores how action could be undertaken in India today, in a way that commits India to longer run goals for greenhouse emissions but does not raise the short run cost to the development process in India.
The approach proposed is a modification of the McKibbin-Wilcoxen Blueprint for climate policy, which relies on establishing property rights and markets in both short term and long term emission permits.
Professor Warwick McKibbin
5 May 2004 - Publication
Long run projections for climate change scenarios
The prediction of future temperature increases depends critically on the projections of future greenhouse gas emissions. Yet there is a vigorous debate about how these projections should be undertaken and how reasonable is the approach of the Special Report on Emissions Scenarios (SRES) published by the Intergovernmental Panel on Climate Change (IPCC)which forms the the basis of nearly all recent analyses of the impacts of climate change. In particular there has been significant criticism by Ian Castles and David Henderson regarding the plausibility of some scenarios.
This paper explores a range of methodological issues surrounding projecting greenhouse emissions over the next century, including an evaluation of the Castles and Henderson critique.
Professor Warwick McKibbin
9 Feb 2004 - Publication
Globalization and disease: the case of SARS
The outbreak of SARS in late 2002 has alerted the world to the potential economic costs of epidemics. The purpose of this paper is to provide an assessment of the global economic impacts of the SARS disease as well as provide a more comprehensive approach to estimating the global consequences of major disease outbreaks.
Professor Warwick McKibbin
24 Oct 2003 - Publication
Are Australian policymakers operating in a new global economy?
Developments including the rise of vertically specialised trade and the growing internationalisation of production, broader and deeper goods and financial market integration, the extension of international trade to the previously “non-tradeable” services sector, and the spread of international trade and finance to incorporate a growing number of countries suggest that in many respects Australian policymakers are now operating in a “new global economy”.
Mark Thirlwell
20 Sep 2003 - Publication
Is the international trading system fragmenting? The dilemma for Australian trade policy
The post-World War II international trade policy framework is being challenged by a proliferation of bilateral and regional trading arrangements. Australia faces a choice over whether to join this preferential trade bandwagon and risk collateral damage to the multilateral trading system, or to go no further down the preferential trade road but risk being “left behind” in the event that the rush to PTAs continues, leaving the multilateral system increasingly sidelined.
Mark Thirlwell
28 Aug 2003 - Publication
The consequences of China's WTO accession on its neighbours
Southeast Asian industrial exports are now facing intense competition from Chinese industrial exports. How much more would competition increase with China's recent accession to the World Trade Organization? Would Indonesia, Malaysia, Philippines and Thailand (the ASEAN-4) de-industrialise and return to their roles in the 1950s and 1960s as primary commodity exporters? Or would there be sufficient lucrative niches within the manufacturing production chains that the ASEAN-4 could specialise in? This paper explores these issues using a global simulation model called the G-Cubed (Asia pacific) model.
Professor Warwick McKibbin
30 Jul 2003 - Publication
Estimates of the costs of Kyoto-Marrakesh versus the McKibbin-Wilcoxen Blueprint
In this paper we update our earlier estimates of the cost of the Kyoto Protocol using the G-Cubed model, taking into account the new sink allowances from recent negotiations as well as allowing for multiple gases and new land clearing estimates. Rather than comparing this to the original Kyoto Protocol as other studies have done, we compare the estimates from the current Kyoto Protocol to a realistic alternative to the Kyoto Protocol outlined by McKibbin and Wilcoxen
Professor Warwick McKibbin Peter J. Wilcoxen
25 Jul 2003 - Publication
Changes in equity risk perceptions: global consequences and policy responses
The current weakness in the global economy has generated a debate on the likely outlook for the world economy and the appropriate response for monetary policies. The world economy is currently being buffeted by a number of major shocks. A particular feature has been the large fall in equity markets in many countries. In this paper we use the MSG3 global economic model to assess the impact on the global economy of a sharp rise in the equity risk premium in a number of countries.
Professor Warwick McKibbin
Search
|
 |
Email Updates
Register your details here to receive email updates from the Lowy Institute
|
|
