Monday 24 Jul 2017 | 18:45 | SYDNEY
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Global Economy

Overview

Measured in US dollars, annual global gross domestic product is now somewhere over $72 trillion.  This figure incorporates all of the output in terms of goods and services within states, and also between states.  The global trading system represents around US$22 trillion of economic activity. Outside of the ‘real economy’, global financial asset markets are now worth well over US$600 trillion.   For perspective, Australia’s gross domestic product is worth around US$1.5 trillion.

What the Lowy Institute does

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 for International Policy.

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.

The International Economy Program regularly produces analysis on the major components of the world economy, principally in the areas of trade, finance, macroeconomic policy, and global economic governance.  The G20 Studies Centre, established at the end of 2012, places a particular focus on the role of the G20 as the primary global economic governance response to the global financial crisis.

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.  

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

The G20 Hamburg riots and the German election

In many ways, the city-state of Hamburg embodies the self-image that contemporary Germany likes to project. With sparkling new galleries and trendy cafés interspersed among rough-and-tumble beatnik quarters and burly workers' bars, it exudes an elegant but unpretentious charm. The gleaming new

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

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

What did we learn from the Asian crisis?

Twenty years ago next weekend, the Thai authorities abandoned their costly defence of a fixed exchange rate, allowing the baht to float. Thus began the Asian crisis, which brought to an end the Asian Miracle era for the countries involved. Not only did Thailand, Indonesia and South Korea suffer

Greek debt: kicked down the road yet again

It is almost eight years since the Greek debt crisis began. Now, with Greek GDP 25% lower than at the start of the crisis and nearly one quarter of the work force unemployed, the European creditor countries have once again failed to reschedule the debt in a way that would be sustainable and allow

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