Friday 07 Aug 2020 | 00:05 | SYDNEY
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Stephen Grenville's picture
People | experts Stephen Grenville
Nonresident Fellow
Lowy Institute
Stephen Grenville's picture
Areas of ExpertiseRegional economic integration; Australia's economic relations with East Asia; international financial flows and the global financial architecture; financial sector development in East Asia

Timor Gap: A response to Senator Xenophon

Given the tragic history of East Timor, it is understandable that Senator Nick Xenophon should argue for an early and generous settlement of the Timor Gap border issues with East Timor. We are rich and they are poor. Current agreements do not draw the division between Australia and Timor

Indonesia: Too many 'unforced errors'

Maybe it's just the title – Condemned to Crisis? – that gives Ken Ward's book such a downbeat despairing tone, as if the accident of geography has locked us in an unhappy marriage with Indonesia and there is not much we can do about it. Of course we should be realistic: we won't ever have the

In 1966, Australia stood by Indonesia in debt talks

Further to my post on Hermann Abs' role in sorting out the debt of both Germany and Indonesia, there is a small historical footnote on the Indonesian debt negotiations which demonstrates that there was once a much more positive relationship between Jakarta and Canberra. Some of the Sukarno-debt

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

Indonesia under SBY: Stability, stagnation, or both?

'What's in a name?' Shakespeare's Juliet asks. Quite a lot, as things turned out for her. And so it is for the just-published proceedings of the ANU Indonesian Update, titled The Yudhoyono Presidency: Indonesia's Decade of Stability and Stagnation. A 'mini' version of the Update was held at the

Macro policy: At last, IMF is rethinking old paradigms

The unexpected policy failures associated with the 2008 global financial crisis have provoked soul-searching among macro-economists. The leading lights among the profession were at the International Monetary Fund's Rethinking Macro Policy conference in April. Olivier Blanchard, the widely admired

The rise and rise of the Renminbi

The renminbi is still some distance from being an 'international currency', but it is moving fast in that direction, passing some important waypoints over recent months. It's not exactly clear what being an 'international currency' means, but one aspect is whether the currency is included in the IMF

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

Asian economies still growing

Despite gloomy talk about slowing economic growth, Asia has continued to grow strongly, and the IMF has forecast this will continue this year and next. Asia is still by far the most dynamic region in the world, accounting for 40% of world GDP but nearly two-thirds of global growth. Look, too, at

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

The secretive TPP: Never again

One aspect of the Trans-Pacific Partnership (TPP) that has come under criticism is the lack of transparency in the negotiating process. Could a more transparent model be used for these kinds of negotiations? In other areas of official decision-making, recent decades have seen a big shift towards

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

Indonesia: Australia is missing the story

Indonesian and Australian journalists were at the Lowy Institute on Monday, once again trying to explain why the press in each country plays such a minor and often perverse role in helping mutual understanding. The causes are many, but one that deserves more thought is the way China hogs the

G20 Monitor: Investment, inclusiveness, implementation, and health governance

The 16th issue of the G20 Monitor examines the three priority ‘i’s of the 2015 Turkish Presidency: inclusiveness, implementation, and investment. It explores the basis for the ‘i’s, assesses progress made on the priorities to date, and suggests policies the G20 can pursue for each priority.

The TPP and intellectual property rights

Earlier posts have discussed how the Trans-Pacific Partnership (TPP) – if it comes into force – will be part of the process of setting global rules across a wide range of issues, including intellectual property rights. The just-released Harper Competition Policy Review notes the importance of

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

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

The 'beggar-thy-neighbour' currency wars

Leon Berkelmans is in good company in defending the policy actions which have come to be described as 'currency wars'.  Ben Bernanke gave the same defence of the US Fed's actions while he was Chairman: while low interest rates and 'quantitative easing' (QE) may give the domestic economy an extra

G20 membership is about much more than GDP

Mike Callaghan reminds us that where we are on the global GDP ranking may not be all that important to how well we live. When the press tries to dramatise the relationship between global rankings and our prospects of keeping a place at the G20 table, there is another point to be made: G20 membership

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

How much is too much? The debt mystery

The 2008 financial crisis left no doubt that ill-considered debt can cause major damage not just to an individual country, but to the global economy. You might think that by now, six years later, balance sheet repair would have taken debt below pre-crisis levels. However, debt burdens are

Is globalisation slowing?

In the decades leading up to the 2008 financial crisis, international trade typically grew much faster than GDP. This reflected increasing global economic integration: tariff barriers were coming down, trade groups (eg. the eurozone, NAFTA, ASEAN) facilitated trade through regulatory simplification

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

Is China slowing down? Not much

The Wall Street Journal: China's economic growth slowed to 7.4% in 2014, downshifting to a level not seen in a quarter century and firmly marking the end of a high-growth heyday that buoyed global demand for everything from iron ore to designer handbags. The slipping momentum in China, which

Oil drops 50%, world shrugs

What does the fall in the price of oil do for global economic growth? If the price of oil had swiftly risen by 50%, economic commentators would be calling this an economic disaster. In fact the price has fallen by 50% since June last year, yet this ray of good news hasn't pierced through the gloom

Growth and equality: No trade-off necessary

It has long been a central tenet of conventional economic wisdom that there is a trade-off between growth and equality: if governments redistribute resources from the rich to the poor, growth will be slower. Even recognising this, many economists still favour redistribution, for broad social reasons

Why Peter Thiel is wrong about monopolies

A few weeks ago Sam Roggeveen quoted PayPal founder Peter Thiel, who argued that competition is over-rated and monopoly would enhance innovation. We shouldn't be surprised that business people are in favour of monopoly. In 1776 Adam Smith observed: People of the same trade seldom meet together,

Financial stability: Did the G20 go far enough?

Financial stability was not the most headline-grabbing topic discussed at the Brisbane G20 meeting, but judging from the official communique word-count (a full 175-word paragraph in the three-page document, plus four substantial items in the annexes), a fair bit must have happened. Governor of the

East Timor, Australia and the 'Timor Gap'

Tom Allard recently reported in the Sydney Morning Herald that Australia and East Timor are ready to restart talks on the maritime boundary between the two countries, with all its complications of petroleum revenues and history. The tradition is to keep these talks under wraps, but Allard's article

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