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The International Economy Program

The International Economy program aims to explain developments in the international economy, and influence policy. It does so by undertaking independent analytical research.

The International Economy program contributes to the Lowy Institute’s core publications: policy briefs and policy analyses. For example, the program contributed the Lowy Institute Paper, John Edwards’ Beyond the Boom, which argued that Australia’s transition away from the commodities boom will be quite smooth.



Latest Publications

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

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

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

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

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

Does monetary policy need to be reinvented?

There is a widespread view that monetary policy has been fundamentally changed by the 2008 financial crisis. The IMF’s Chief Economist Olivier Blanchard says that ‘Monetary policy will never be the same’. Policy certainly explored new areas in response to unusual circumstances, but when the

The Trans-Pacific Partnership: Where have we got to?

The latest round of negotiations in Singapore for the Trans-Pacific Partnership (TPP)  wound up last week, still a long way short of agreement. Negotiators will meet again in January.  Thanks to WikiLeaks and other seepages from the confidential negotiations, the public discussion is starting

GrainCorp and the complexity of foreign investment

The Australian Treasurer's rejection of the $3.4 billion take-over bid for grain handler GrainCorp by American firm Archer Daniels Midlands (ADM) has set a number of confusing and conflicting arguments running. It looks like a narrow issue dominated by domestic politics, but raises wider national

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

Infrastructure: Overcoming sovereign-debt phobia

Infrastructure is high on the agenda for G20, yet most aspects of infrastructure are essentially domestic policy matters, with little need — or room — for international cooperation. So what exactly might the G20 do?  There is a disconnect between the many viable infrastructure projects in

Next week could be a good one for multilateralism

Mike Callaghan is Director of the Lowy Institute's G20 Studies Centre. The world badly needs a bit of good news. Who would've thought it might come from the prospect of a WTO multilateral trade deal when ministers meet in Bali on 3 December 2013? At the start of the year the French industry

Will Asia's rapid growth continue?

Convergence – the catch-up process whereby poor economies grow substantially faster than the mature economies – may be the most important economic story in the past fifty years. It is transforming the world, shifting hundreds of millions out of abject poverty while simultaneously shifting the

Secrecy, intellectual property and the TPP

WikiLeaks has turned its attention to the Trans Pacific Partnership. The press, in Australia and overseas, has noticed.  The Interpreter has previously drawn attention to the complex issues (some would say the downside concerns) of the Trans Pacific Partnership. The negotiations can be seen as

QE has global effects, needs global coordination

The unwinding of quantitative easing (QE) has been postponed for the moment. Financial markets have regained their composure and their panicky flight from emerging economies (notably India and Indonesia) has reversed. But the ‘taper’ of QE must inevitably occur: the emerging economies have a

Asian crisis and GFC compared: All the wrong lessons

  Do we learn from economic crises? The 2008-10 crises in America and Europe and the Asian crisis a decade earlier present a rich source of contrasting experience to examine. What a divergence there is between the 2008-10 policy responses and 1997-8! In 1997 IMF funding, even supplemented by

Can the world influence US economic policy?

Mike Callaghan is Director of the Lowy Institute's G20 Studies Centre. The US debt ceiling crisis was the dominant topic at the recent G20 and IMF meetings in Washington. But did these international meetings have any impact on US policy? Finance ministers  all warned that a catastrophe would

Reader riposte: Pro- and anti-nuclear environmentalism

Richard Broinowski writes: Lowy Institute Research Fellow Daniela Strube should perhaps spend a bit more time examining trends in energy research. The pro-nuclear environmentalists portrayed in the film Pandora’s Promise are neither intriguing nor rare. For it is a standard ploy of big energy

Who are the real laggards in global growth?

For the past three months there has been a steady chant of pessimism about growth prospects in the emerging economies, with the IMF’s voice prominent in the wailing. As IMF Managing Director Christine Lagarde told the G20 meeting in September: ‘Just as some advanced economies have begun to

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

Hey growth pessimists, why the long faces?

Economics has long been seen as the dismal science. Current commentary provides evidence. Whether discussing the cyclical conjuncture or the prospects for longer-term sustainable growth, gloom prevails. Certainly, the mature economies have had a pathetically limp recovery from the 2008 financial

China's bullet trains: Build it and they will come

There's been a lot of talk about overcapacity, but the New York Times reports that China's high-speed rail (HSR) network is a success: China’s high-speed rail system has emerged as an unexpected success story. Economists and transportation experts cite it as one reason for China’s continued

Blame China for the global financial crisis?

In the five years since Lehman Brothers declared bankruptcy, the scale of the financial sector debacle has become clear. The global financial crisis (GFC) can now be seen as the product of multiple policy and institutional failures embedded within misguided doctrine. Amazingly, with the full

Farewell to my own turbulent decade

When I joined the Lowy Institute a little more than a decade ago, the price of iron ore was below A$30 per tonne; the Australian dollar was worth around US$0.65; the cash rate stood at 4.75%, a little way into a gradual tightening phase that would take it up to 7.25% by early March 2008; Australia

The St Petersburg G20 blues

 Mike Callaghan is Director of the Lowy Institute's G20 Studies Centre. The St Petersburg G20 summit is over. Now the hangover. In assessing its significance and implications for Australia when it chairs the G20 next year, here are nine questions to consider. 1. What was the impact of Syria?

Trade priorities in the 2013 election

Shadow Foreign Minister Julie Bishop's outline of the Coalition's international policies emphasised the importance of trade in general and free trade agreements (FTAs) in particular. She singled out for special mention those countries which have gained advantage by signing bilateral treaties ahead

The dark art of economic forecasting

Since so much international economic discussion revolves around GDP forecasting, it's worth looking at the quirks and pitfalls of this black art. Yogi Berra famously said 'It's tough to make predictions, especially about the future'. This view has been confirmed by more rigorous analysis, both at

Who will lead the Fed?

Ben Bernanke's term as Chairman of the US Federal Reserve finishes in January next year, and President Obama has indicated that he will be replaced rather than reappointed. The past few years demonstrate that running a central bank has plenty of pitfalls, with the 2008 crisis identifying mistakes

TPP: The fight over investment rights

Amy Schwebel is a research officer for the Australian Council of Trade Unions. After three-and-a-half years of negotiation, the investment chapter of the Trans Pacific Partnership (TPP), a regional trade agreement being negotiated by countries across Asia and the Pacific, remains hotly

G20 Brisbane: Can Australia do the 'vision thing'?

Mike Callaghan is Director of the Lowy Institute's G20 Studies Centre. Tax and trade will be two high profile issues on the G20 agenda when Australia chairs the forum in 2014. These two topics have a common driver: can policy keep up with a rapidly changing global production landscape? On trade,

Farewell, consensus future?

Back in 2010, I wrote a piece called Our Consensus Future, which tried to set out what I thought represented a fairly broad consensus forecast for the global economy over the medium term. It was a view of the world underpinned by the idea of the Great Convergence, and which was reflected in range

Robotics and unemployment

Australia's public broadcaster SBS has been screening the PBS Newshour for years (decades?) now, and for me one of the highlights of the program is the regular segments by economics correspondent Paul Solman. I don't think I've ever seen a better explainer of economic ideas. Here's a recent

Emerging economies: Why so gloomy?

Ever since the 2008 financial crisis left many advanced economies in disarray, global growth has been sustained only through the continued spectacular performance of the emerging countries, especially China. But a wave of gloom has now spread concerning their prospects and the knock-on

Indonesia's development formula II

Part 1 of this post here. The debate Joe Studwell has advanced in How Asia Works (see Sam Roggeveen's three-part interview here) is, in fact, not that novel. Studwell is not alone in advocating industrial policy: Justin Lin, former World Bank chief economist, makes the same argument in his