Global Economic Governance

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Time to step up on global kleptocracy

When the Pandora Papers were published last month, few registered their significance for Australian statecraft. Spanning 11.9 million leaked documents, and exposing the property empires and shell companies of kings, presidents and celebrities, the revelations generated scandals and condemnation. But

By Vafa Ghazavi

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Framing globalisation

Six Faces of Globalization: Who Wins, Who Loses, and Why it Matters, by Anthea Roberts and Nicolas Lamp (Harvard University Press, 2021) People use mental shortcuts to organise their thinking about complex issues, but because the same situation can be presented in different ways,

By Anthea Roberts, Nicolas Lamp

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The US and the next leader of the OECD

Although it may not regularly make headlines, the Organisation of Economic Cooperation and Development (OECD) is an important multilateral institution. With its standard-setting capability, the organisation’s 300 committees and 3300-member secretariat have carved unique policy niches on trade,

By Daniel F. Runde

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Indonesia’s role in multilateral development banks

After Jim Yong Kim resigned last month, President Donald Trump indicated he intends to nominate senior US Treasury official David Malpass to lead the World Bank. Under an unofficial agreement, the World Bank President always comes from the United States. Although the multilateral development

By Retno Maruti

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Managing economic risk in Asia: A strategy for Australia

Barry Sterland’s new Lowy Analysis explores the possibility of a future economic crisis in our region – this is not today’s problem, but something we should be prepared for. The paper benefits from his years of experience in the Australian Treasury and the International Monetary Fund. It sets

By Stephen Grenville

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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

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Toward more stable capital flows

Globalisation has received a bad rap lately, being blamed for lost jobs, depressed wages, rising income inequality, Brexit, and the election of Donald Trump. As the European Central Bank's President Mario Draghi observed at this year’s gathering of central bankers at Jackson Hole, the social

By Mike Callaghan

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Trans-Pacific Partnership in doubt, but does it matter?

The Peterson Institute in Washington has published a report on the international trade policies enunciated by the two US presidential candidates during their campaigns. Its conclusion: Clinton's proposed trade and international economic policies would damage American well-being, primarily but not

By Stephen Grenville

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If you want my opinion...

G20 summits are a busy time for scholars of global economic governance. There is a surprisingly small pool of us around the world who look at these issues day in, day out, and there are literally thousands of journalists whose minds are either turning to the G20 for the first time, or for the first

By Tristram Sainsbury

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Asian central banks should 'keep calm and carry on'

Originally published in the Nikkei Report.

By Stephen Grenville

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Capital controls: Australia still needs an Iceland option

I was happy to see Acting Deputy Secretary Justin Brown elaborate on the Department of Foreign Affairs and Trade's thinking in regard to the Trans-Pacific Partnership (TPP) last week on The Interpreter. To recap, back in February I discussed one of my TPP misgivings: I think the TPP does not

By Leon Berkelmans

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Fed rate hike: time now for central banks to go back to basics on monetary policy

Ever since the 'taper tantrum' in May 2013, global financial markets have been on tenterhooks, anxiously anticipating the first increase in US interest rates in almost a decade. Now it's happened and the sky hasn't fallen in. Perhaps, as one market observer has suggested, we can start obsessing

By Stephen Grenville

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IMF reforms pass Congress but too late to salvage US leadership credentials

The US Congress has finally passed long awaited IMF governance reforms. President Obama claimed it as a victory for the White House that will strengthen 'America's leadership of the IMF'. USA Today reported 'Congress finally preserves US leadership in global finance'. Some leadership. With the US

By Mike Callaghan

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Australia and the US: good friends can sometimes differ in global economic diplomacy

It's not often that Canberra's senior bureaucrats provide a sustained critique of the functioning of global economic diplomacy. But Martin Parkinson did just that a week ago in the 5th Warren Hogan Memorial Lecture, using the extra freedom he had while 'between jobs', after he was dismissed in

By Stephen Grenville

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China's Belt and Road initiative likely to bypass Australia

China's Belt and Road initiative – a vast array of promised Chinese investments in transport, energy and communications across Eurasia and Africa – is emerging as one of the key foreign policy priorities of Xi Jinping's presidency. President Xi Jinping and then President of Sri

By Benjamin Herscovitch

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'The Courage to Act': What Bernanke saw at the global financial crisis

Ben Bernanke was a member of the US Federal Reserve Board in the tumultuous period from 2002 until 2014 and Chairman from 2006 to 2014. His version of this period is told in The Courage to Act, his 600-page meeting-by-meeting account. This degree of detail would overload a reader who just wanted to

By Stephen Grenville

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Syrian refugee crisis: Time for the G20 to step up

By the Lowy Institute's G20 Fellow Tristram Sainsbury and Research Associate Casper Wuite. Chatham House's Paola Subacchi recently asked why the G20 has not addressed the Syrian refugee crisis. She acknowledges that refugee issues have not historically been within the G20's bailiwick. However, she

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Waiting for the Fed to move

Global financial markets are on tenterhooks waiting for the US Federal Reserve to decide when to start raising the Fed funds rate – the short-term interest rate which sets the datum for many other interest rates. The media have reported this in portentous tones, exploring every possible downside

By Stephen Grenville

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Can the W20 influence the G20 to unlock opportunities for women?

A new engagement group was launched in Ankara on Sunday with the aim of encouraging the G20 to bring more women into the global economy. The launch of the Women 20 (W20) was a prominent event, with the Turkish Prime Minister Ahmet Davuto?lu, IMF Managing Director Christine Lagarde and OECD

By Hannah Wurf

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Why we shouldn't worry: This is what an economic transition is supposed to look like in China

Growth is certainly slower and its structure is changing, but is the outlook for China's economy quite as awful as global share markets seem to think? Now the world's biggest economy (using the IMF's purchasing power parity measure), China matters vastly more for world markets than it did a

By John Edwards

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Note to Beijing: You can't tell financial markets what to do

There's a rule in economics called Goodhart's law: when a measure becomes a target, it ceases to be a useful measure. If a government chases a particular economic variable, then it becomes influenced by policy, and so loses its meaningfulness as an input. 'Information value' is lost in the

By Julian Snelder

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Asian financial markets: Confected panic from professional doomsayers

Over the last few weeks, global financial markets have once again demonstrated their predilection for over-reacting to ephemeral news. For their part, the media are always happy to pad out the 24-hour news cycle with a breaking crisis. If it's transient, so much the better: you can report a fresh

By Stephen Grenville

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Economic crisis in China? We're not there yet

I started my job at the Federal Reserve three weeks before Lehman Brothers declared bankruptcy. I wish I had kept a diary of my initial months at the Fed, so I could recall clearly what we thought was happening each day. I do remember there was a discrete point where suddenly everything felt like

By Leon Berkelmans

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Why we still need UN climate negotiations

The Marrakesh Accords, the Bali Roadmap, the Cancun Agreements, the Durban Outcomes, the Doha Climate Gateway, the Lima Call for Climate Action – the grand names given to decisions taken under the UN's Framework Convention on Climate Change (UNFCCC) stand in contrast to the meagre progress made on

By Seb Henbest

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Are we on the threshold of a United States of Europe?

Four days ago, French President François Hollande declared his in-principle commitment to the creation of a 'euro government, with the addition of a specific budget and a parliament to ensure democratic control.' This is more an opening gambit in a debate about the terms of putative

By Matthew Dal Santo

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History rhymes on Greek debt

Just about everyone agrees that the Greek problem has been kicked down the road again, and probably not even very far. The fantasy nature of the 'agreekment' is clear. Let's put to one side, for instance, a structural reform program which demands that Sunday be mandated as a work-day. This might

By Stephen Grenville

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China's record shows it isn't ready for global leadership

Michael Thawley's comments on China's present global leadership credentials and ambitions are correct and phrased in the refreshingly direct manner Australians usually take as a badge of national pride and uniqueness. The fact that his comments caused such a stir in Australia (and seemingly in

By Malcolm Cook

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Beijing should hasten slowly on AIIB

The establishment of the Asian Infrastructure Investment Bank (AIIB) reached another milestone on Monday when 50 of the 57 founding members signed the AIIB's Articles of Agreement. Seven countries are still sorting out domestic requirements before signing. China's Finance Minister Jiwei Lou and

By Mike Callaghan

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Four observations about the AIIB's Articles of Agreement

With the signing of the AIIB's Articles of Agreement in Beijing yesterday, how is the Bank shaping up? Here are some key things that struck me reading the Agreement: Membership The Bank's members are split into two groups: regional and non-regional. Regional members include those countries

By Philippa Brant

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IMF belatedly rethinks austerity

When we get enough perspective to write a balanced history of the 2008 global financial crisis and the subsequent feeble recovery, fiscal policy mistakes will surely feature largely in the narrative. In the form of a new IMF paper, we are beginning to see that history taking shape, and with it a

By Stephen Grenville

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BRICS New Development Bank moves ahead quietly

While Beijing's Asian Infrastructure Investment Bank (AIIB) has won overwhelming support (to the surprise of many, including China itself), another bank headquartered in China seems to be flying under the world's radar. Few people have heard of the BRICS New Development Bank (NDB). This was the

By Ye Yu

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Five points that get lost about the Greek debt crisis

Rather than focus on the blow-by-blow developments of the umpteenth meeting in the Greek crisis, here are some higher level issues that often get lost in the summitry din: At the moment, the parties are negotiating over a disbursement of €7.2 billion. This is the last €7.2 billion to be

By Leon Berkelmans

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Yuan deserves a place in the IMF basket

Yuan deserves a place in the IMF basket Stephen Grenville Nikkei Report 11 June 2015 Click here for the online text.

By Stephen Grenville

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AIIB: US is not the only loser, and China is not such a big winner

The recent rush by Western countries to join the Asian Infrastructure Investment Bank (AIIB) before the 30 March deadline set by China was widely, and rightly, seen as a policy failure for the US. Earlier, the US had openly opposed the bank. The US has also resisted reform of the Bretton Woods

By Robert Wihtol

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Still debating inequality, 40 years on

Thomas Piketty's Capital in the Twenty-first Century put inequality centre-stage in the economic debate. But the topic has been around for a long while. Brookings has recently republished Arthur Okun's 40 year-old Equality and Efficiency: The Big Trade-off, The launch was an opportunity to bring

By Stephen Grenville

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What the G20 can do about infrastructure

Infrastructure is now a standard item on the G20 agenda. Serious infrastructure shortages are ubiquitous. With global economic growth slow, ample construction capacity and interest rates at historic lows, there seems to be an opportunity to address the infrastructure gap. But many governments see

By Stephen Grenville

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Is the G20 getting serious about climate change?

The G20 does not have a great track record when it comes to climate change. This is a problem, because the group includes the world's main greenhouse gas emitters. G20 countries have agreed to a global target not to warm the earth more than 2°C above pre-industrial levels as part of the UN

By Hannah Wurf

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With Greece on the brink, has the IMF learnt its lesson?

With Greece once again teetering on the brink of default, a recent paper from the Centre for International Governance Innovation explores one episode in the amazing saga of how this tiny country came to threaten the viability of the euro, and left a damaging legacy for procedures and governance at

By Stephen Grenville

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What to do about weak world growth

Forecasts prepared for the IMF's 'Spring Meeting' in Washington last week predict global growth of around 3.5% this year, about the same as in the last few years. This is not the 'slowing' discussed so often in earlier Fund documents, but nor is it the normal robust recovery that might be expected

By Stephen Grenville

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New World Economic Outlook report is out

This week we've had the IMF and World Bank spring meetings. Economic heavy-hitters from around the world descend on DC to attend committee meetings, seminars, briefings, and other policy-maker fun. Also, the IMF's World Economic Outlook is released. Chapter 4 in the most recent edition looks at

By Leon Berkelmans

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Why a 'Google tax' is not the answer to corporate tax avoidance

Can tax laws keep up with globally operating businesses and constant technological change? This is a fundamental challenge confronting governments. It is also the reason tax is getting a lot of attention in the Australian media, particularly coverage of the Senate inquiry into corporate tax

By Mike Callaghan

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Inclusive growth should not be the G20's game

In 2002 David Dollar and Art Kraay, both at the World Bank at the time, published an article in the Journal of Economic Growth called 'Growth is Good for the Poor'. Dollar and Kraay showed that if an economy's growth increased by a percentage point, then growth of the incomes of the poor increased

By Leon Berkelmans

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Why the AIIB should not be governed like the World Bank and IMF

What is best practice for the governance of the Chinese-initiated Asian Infrastructure and Investment Bank (AIIB)? Australia says this remains a major concern, even though it has finally agreed to become a prospective founding member of the bank. 2014 Annual Meetings of the Board of Governors of

By Mike Callaghan

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China's reserve-currency ambition

In mid-2009, with American finance reeling from the Lehman Brothers collapse, the nation's Treasury Secretary addressed his prestigious alma mater Peking University. 'How safe are China's investments in US Government debt?', challenged one student. 'Very safe', the Secretary answered to derisive

By Julian Snelder

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Is the Great Moderation over?

In what appeared to be a case of spectacularly bad timing, the Bank of England held a conference in September 2007 on 'sources of macroeconomic stability'. You see, from the early 1980s the business cycle in developed economies had become much less volatile. A term had been coined for this

By Leon Berkelmans

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One belt, one road? China's community of common destiny

More details emerged over the weekend about two Chinese big-ticket initiatives, 'One Belt, One Road' and Asian Infrastructure Investment Bank (AIIB). Speaking at the Boao Forum for Asia, President Xi Jinping outlined his vision for the region in a keynote address titled 'Towards a Community of

By Philippa Brant

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Are China's shadow banks going to bring the economy down?

There has been much fretting about China's growth over the past five years. One special focus for hand-wringing has been the Chinese financial system and its non-banking component – the shadow banking system – in particular. Financial growth in China has certainly been rapid since 2007, a

By Stephen Grenville

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UK budget: A test for 'expansionary austerity'

The 2008 global financial crisis provided a rare test-bed for macroeconomics — an opportunity to sort out some old controversies. One issue dominated the debate during the recovery phase: with national budgets and official debt pushed up by the crisis, should budget austerity be imposed as a

By Stephen Grenville

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China and the AIIB: Towards a new rules-based order?

Australia's likely decision to become a founding member of the Asian Infrastructure Investment Bank (AIIB) marks the loosening of America's 70 year command over global governance. US Secretary of State John Kerry and World Bank President Jim Yong Kim at the African Growth and Opportunity Act

By Malcolm Jorgensen

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The Asian Infrastructure Investment Bank and the rise of regionalism

Should Australia join the Chinese-sponsored Asian Infrastructure Investment Bank (AIIB)? As often happens in international affairs, the answer is not found in the technical pros and cons of the proposal, but in the politics. America seems to have strongly encouraged its close Asian friends (Japan

By Stephen Grenville

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