Monday 19 Feb 2018 | 09:45 | SYDNEY
What's happening on

The future role of international financial institutions

The role of the multilateral development banks (MDBs) and other international financial institutions (IFIs) is back in the policy spotlight. The latest attention comes via the G20 Eminent Persons Group (EPG) on Global Financial Governance, formed by G20 Finance Ministers at their meeting

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

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

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

IMF: the hard yards on reform are still to come

It finally happened. The US delivered on its long-standing promise to deliver the 2010 IMF quota and governance reforms, spreading a cascade of pre-Christmas cheer across the economic policymaking world. My colleague Mike Callaghan has neatly summarised the implications on US leadership. I want to

Decoding China's GOOD approach to the G20

With this year's summit season coming to an end, Turkey will officially hand over the G20 hosting baton to China on 1 December 2015. The Hangzhou Leaders' Summit has already been announced for 4 and 5 September 2016, slightly earlier than previous years to avoid clashing with the US presidential

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

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

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

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

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

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

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

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

Negative interest rates: We are flying blind

We live in strange economic times. Depositors in Denmark are paying interest to their banks and borrowers are being paid when they take out a loan. The basic principles of finance have been turned on their head. One commentator has noted that 'something economists thought was impossible is

Ukraine: IMF sent in where others fear to tread

This week the IMF Executive Board will consider a proposal to provide Ukraine with a US$17.5 billion Extended Fund Facility. The IMF Managing Director explains that this program 'can succeed'. But it has to be said that the chances are low, given current geopolitical circumstances and Kiev's recent

How Greece and Europe can both win

The press is making much of the academic qualifications of Greece's new finance minister, Yanis Varoufakis. His specialisation is economic game theory, which in this case might be described as 'the art of bargaining'. Good bargaining skills are, indeed, important. But there are also some basic

Memo to IMF reformers: Don't let Congress get you down

By Lowy Institute Non-Resident Fellow Mike Callaghan and G20 Research Fellow Tristram Sainsbury When it comes to IMF quota reform, the words of Yogi Berra come to mind: 'It's like deja vu all over again'.  IMF First Deputy Managing Director David Lipton and Managing Director Christine Lagarde,

The IMF's pessimism is misplaced

When the IMF produced its last World Economic Outlook in October, one of the risks it forecast was a possible oil price increase. A US$25 per barrel increase, the IMF said, would take at least 0.5% off global economic growth. Now, even with the change in oil price twice as large and in the opposite

No, the IMF did not cause the Ebola crisis

Headlines blaming the IMF for the Ebola crisis are something you may expect in the tabloid press. However, a robust debate on the role of the IMF in the spread of Ebola was started by an article in The Lancet, a leading health journal. Four British professors claimed that the fiscal austerity

Which countries are driving global growth?

Sometimes a picture is worth a thousand words. With the G20 focused on increasing economic growth, it's worth remembering where the global action is. The above graph from the IMF Multilateral Policy Issues Report, published in July, shows that the emerging economies have been doing the heavy

Why the IMF's poor forecasting matters

Economic forecasting is the butt of jokes, but someone has to do it. You can't make sensible macro policy without some view of how the economy will travel. It's the IMF's thankless job to be the high-profile forecaster for the globe. The Fund's latest World Economic Outlook acknowledges its recent

IMF changes its tune on infrastructure

In its latest World Economic Outlook, the IMF has joined the chorus of international institutions (G20, OECD) calling for more infrastructure spending. What new elements does the Fund bring to this argument? Global growth has been disappointing. One reason is that governments have cut back on

When should the IMF apologise?

If you make a mistake, common courtesy says you should apologise. The IMF made a mistake in its forecasts for the UK economy — a high profile mistake. It admitted it got it wrong. But should the IMF have apologised? In 2013, IMF chief economist Olivier Blanchard publicly said that UK

Global financial crisis: Did the system really work?

Much of the mountain of commentary and analysis of the 2008 Great Recession has been either critical (Paul Krugman might be typical), or a self-interested defence (Tim Geithner and Larry Summers provide examples). Daniel Drezner's The System Worked is atypical in two respects: he was not a

Is the IMF a political football in the Ukraine crisis?

The way they were. Yanukovich and Strauss Kahn in 2010. Ukraine faces an economic crisis as well as a political one. Its economy is a mess and it will take a lot of money and time to put it on a sustainable growth path. It may not have enough of either. Caught in the middle is the IMF. The