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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.

 

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Latest Publications

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Using economic diplomacy to reduce financial risks in Asia

If Australia’s economic future lies in Asia, then managing the risk of financial crises in the region should be a top concern. Especially as any crisis could also have significant geopolitical consequences. In an analysis for the Lowy Institute, Barry Sterland looks at what Australia can do
By Roland Rajah
18 Sep 17
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Ten years after the GFC, are we safe?

Ten years ago this month, Northern Rock experienced the first depositors' run on a British bank for 150 years and failed shortly afterwards. This was not the first manifestation of the global financial crisis: French bank BNP Paribas had frozen withdrawals from mortgage funds the month before; US
By Stephen Grenville
05 Sep 17
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Addressing global capital flows

International capital flows present serious policy challenges. In textbook economics, such flows are unambiguously beneficial. But volatile flows were a key cause of the 1997 Asian crisis, cross-country financial linkages exacerbated the 2008 global crisis, and capital flows were once again central
By Stephen Grenville
31 Aug 17
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Taxing global capital

Over the past quarter-century, global capital has become far more mobile and some foreign investors have become more sensitive to company tax issues. Much ingenious effort has been devoted to shifting company profits to tax jurisdictions with low rates and to avoiding company tax entirely. Perhaps
By Stephen Grenville
14 Aug 17
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How the IMF evaluates the Asian financial crisis

With this month marking the 20th anniversary of the forced floating of the Thai baht, the IMF has joined the numerous commentaries looking back on the Asian crisis and the lessons learned. The tone of a recently published blog post by IMF Deputy Managing Director Mitsuhiro Furusawa is one
By Stephen Grenville
19 Jul 17
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Safeguarding competition in a cyber economy

The European Commission in Brussels has fined Google €2.4 billion for using its dominant position in search to advantage the Google price-comparison service. The internet giant has yet to give a substantive response, but this case illustrates the challenges that new technology poses for
By Stephen Grenville
12 Jul 17
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A new era of leadership by the G19?

US President Donald Trump arrived in Hamburg for the G20 leaders meeting no friend of globalisation and multilateralism. Most of the analysis so far has focused on Trump himself and the uncertain future of the US-led international economic order. Yet the summit should also bring into sharper focus
By Roland Rajah
10 Jul 17
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Trump’s slow adjustment to global trade realities

The most striking message of the Hamburg G20 leaders meeting is not that the US did not lead the discussion but that it clearly didn’t even wish to. President Trump is most comfortable as a belligerent outsider, not only in Washington but also among his fellow global leaders. His only friend on
By John Edwards
10 Jul 17
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Is the US economy at full employment?

After the painfully slow recovery from the 2008 great Recession, US unemployment is now 4.4%, well below the level commonly regarded as 'full employment'. This would suggest that the economy has reached capacity, with some arguing that the current lacklustre rate of growth is in fact 
By Stephen Grenville
30 May 17
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Capital flows to emerging economies: Still unresolved

This year marks the 20th anniversary of the Asian Financial Crisis. Many factors were involved in that disaster, but grossly excessive foreign capital inflows were the key macro-economic problem during the boom years preceding the crisis. These flooded out when 'euphoria turned to panic without
By Stephen Grenville
23 May 17
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China’s financial concerns

The China bears have been around for years, continuously predicting the end of China's stellar growth story. In 2012 Michael Pettis expected annual growth to average 3% over this decade and in 2015 Tyler Cowen warned of an imminent disastrous financial collapse. So far, so good. China's
By Stephen Grenville
11 Apr 17
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Convention likely to win out in Trump-Xi meeting

Of all the startling events of the Trump Administration's first three months, the one most consequential for the rest of the world is quite likely the meeting between Trump and China's President Xi Jinping at Mar-a-Largo, beginning Thursday. The importance of this meeting is not any likely outcome
By John Edwards
06 Apr 17
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Infrastructure: How Indonesia could shift up a gear

Next year Indonesia will host the annual meetings of the International Monetary Fund and World Bank in Nusa Dua, Bali. This is a big deal: these meetings leave Washington only once every third year and involve thousands of high-level participants. In announcing that Indonesia would host the 2018
By Stephen Grenville
28 Mar 17
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The global economy: Surviving Trump just fine

Two months into the Trump Administration, is it overturning the ‘liberal world order’, as widely feared? By now we ought to have some idea. My conclusion: no, it isn’t. If there was a liberal world order in the global economy on 20 January, 2017, it is still there today. The Administration has
By John Edwards
16 Mar 17
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Time for ADB members to rethink their approach

The Lowy report by Annmaree O’Keeffe, Jonathan Pryke and Hannah Wurf on Strengthening the Asian Development Bank in the 21st Century is an important document. It is one of the best, independent reports on the Asian Development Bank currently available in Australia.  Unfortunately that is easy
By Mike Callaghan
23 Feb 17
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Why Asia still needs a development bank

It is easy to forget that Asia still hosts most of the world’s poor people given the region's remarkable economic success in recent years. Yet almost half of the world’s extremely poor people (326 million out of a global total of 766 million) still live in South and East Asia, according to the
By Annmaree O’Keeffe
13 Feb 17
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The limitations of framing North Korea as a risk

Last week the Lowy Institute's International Security Program, supported by the Korea Foundation, hosted the Australia-Republic of Korea (ROK) Emerging Leaders International Security Forum in Sydney and Canberra, bringing together scholars and future policymakers focused on the bilateral
By Danielle Chubb
07 Feb 17
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What’s ahead for the global economy?

January is the month for new resolutions and economic forecasts and, sometimes, a bit of soul-searching over past inaccuracies. The International Monetary Fund, the chief forecaster for the global economy, just published an update on its October forecast. As usual, the IMF's central
By Stephen Grenville
23 Jan 17
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Why is it so hard for the IMF to accept criticism?

The IMF's Independent Evaluation Office (IEO) was set up in 2001; since then it has produced 26 thoughtful and substantial reports on a wide range of IMF activities. Now the head of the IEO has co-authored a book with the key recommendation that the IMF should use the IEO evaluations to enhance its
By Stephen Grenville
17 Jan 17
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Does Trump threaten Federal Reserve independence?

Will the well-established independence that the US Fed currently enjoys come under threat from a Trump administration, with its unconventional economic ideas? The checks and balances help: Janet Yellen’s tenure until January 2018 is assured and the Fed’s board turns over slowly, with
By Stephen Grenville
19 Dec 16
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Trump's voters will be disappointed by his economics

With all the campaign blather, posturing and hyperbole, we don’t know much about the specifics of President-elect Trump’s economic policy. One thing is clear: it is not possible to satisfy the inchoate economic expectations of those who elected him. Let’s focus on a couple of economic issues
By Stephen Grenville
22 Nov 16
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Should Australia be more like Canada?

The Economist recently promoted Canada as a beacon of tolerance and openness in a world of ‘wall-builders, door-slammers and drawbridge raisers’. It claims Canada has lessons for other countries – particularly in its openness to immigration, support for trade liberalisation and knowing when
By Mike Callaghan
04 Nov 16
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Gloomy forecasts for economic cooperation in Moscow

Last week the Russian Presidential Academy of National Economy and Public Administration hosted a conference on the G20, BRICS and furthering international economic cooperation. In the same week, The Economist launched a ‘special report on Russia’ featuring a cover image of Vladimir
By Hannah Wurf
04 Nov 16
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Yes, monetary policy does still work

Did you know that Australia once had a double dissolution election where the trigger was the conduct of monetary policy? It was our second double dissolution election, in 1951  (we are currently looking at our seventh), and the question at hand was the management of the Commonwealth Bank, which
By Leon Berkelmans
11 May 16
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