Monday 03 Aug 2020 | 19:51 | 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

Why Larry Summers might be wrong about China's growth

Forecasts of China's growth always attract interest, even when they are a year old. Larry Summers and Lant Prichett are getting another good run with the paper they published last year (see my earlier post), which analyses emerging-economy growth in general, but of China and India in particular

G20 Monitor: The G20’s growth agenda

This issue of the G20 Monitor provides a guide to the policies that G20 members will have to tackle to achieve the G20’s 2 per cent growth target, drawing on the recommendations of the IMF, OECD and a number of international think tanks

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

Indonesia's economy at a crossroads

With the passing of the presidential baton from Susilo Bambang Yudhoyono to Joko Widodo just a month away, Indonesia is at a political crossroad, with the first clear break from the politicians who were part of the Soeharto years. Monday's Indonesia mini-update at the Lowy Institute, a half-day

The end of economic convergence? Not quite

Given that emerging economies continue to grow two or three times faster than advanced economies, the persistent gloom about their prospects is puzzling. The latest example comes from The Economist, which argues that convergence, the process by which poorer countries catch up to rich countries

State-owned enterprises: A strange fixation

Mike Callaghan is spot-on in arguing that Australia's foreign investment policy needs a wider reassessment than simply looking at limits on state-owned enterprises (SOEs). Let's try to take this a bit further. This fixation with SOEs is a peculiarly American priority seen also in the Trans-Pacific

Is the Fed acting as the world's central bank?

'The Federal Reserve enters its second century as the closest the world has to a global central bank.' So says Ted Truman, who speaks with some authority as he played a key advisory role for many years with the Fed (the US central bank) and the US Treasury.  However, Truman's detailed account of

The tragedy of European unemployment

The Interpreter hasn't had much to say about European growth for a couple of years, mainly because there hasn't been much of it. European Central Bank President Mario Draghi brought this melancholy story up to date at the central bankers' annual get-together at Jackson Hole, Wyoming, last week, far

Are we measuring international trade correctly?

Perhaps the most fundamental change in international trade in recent decades has been the development of multinational 'supply chains'. The production process has been 'unbundled', with different stages of production taking place in different countries. An iPad is assembled in China, but only $10 of

What next for multilateral trade negotiations?

The Director-General of the World Trade Organization is sounding despondent after the latest setback to the December 2013 Bali Agreement. Meanwhile, a survey of exporters has given some endorsement for the alternative path of free trade agreements (FTAs). Is there any hope for furthering the

Credit rating agencies must do better

Standard and Poors' credit ratings. (Wikipedia.) Foreign investors learn about the Australian economy from a variety of sources, but the credit rating agencies (CRAs) have a special place, as many investment managers are committed to following the rating agencies' assessments. As well, the CRA

The limits of Indonesia's anti-corruption campaign

'Fight corruption!' A Corruption Eradication Commission event in Bandung in 2009. (Flickr/Ikhlasul Amal.) Indonesia's reputation for corruption in not in doubt: it comes 114th out of 177 in Transparency International's ranking. For more than a decade, the Corruption Eradication Commission (KPK)

The long term damage of the global financial crisis

One of the messages of John Edwards' Beyond the Boom is that Australia sailed through the 2008 crisis unscathed. As a result, Australia's GDP in 2013 was 16% higher than in 2007, while many of the G7 countries had barely regained their pre-crisis GDP level: the strongest rebound, in Canada, was only

Infrastructure: An opportunity for emerging economies

Low global interest rates since the 2008 global financial crisis seem to provide an ideal opportunity for boosting infrastructure investment. Bond rates have been historically low, so many governments can borrow at less than the rate of inflation. There is spare productive capacity in most advanced

The limits of 'the Great Convergence'

Economic convergence — the potential for poorer countries to catch up with the richer countries — may be the most important economic narrative of the post-World War II era. More than a billion people have shifted out of extreme poverty, largely by adopting technology and techniques already

Resources boom: Australia's misplaced pessimism

'We'll all be rooned,' said Hanrahan, 'before the year is out.'   Pessimism is a key part of the great Australian tradition, reflecting a history of booms and busts. It has infected the debate on the mining boom of the past decade. But how does it make sense to treat a once-in-a-century windfall

Asia's coal demand: You ain't seen nothing yet

Sam Roggeveen yesterday showed us how much demand for coal has risen in Asia during this century. Now consider what the future will hold. A recent joint publication from the International Energy Agency and the Economic Research Institute for ASEAN and East Asia forecasts what is in store for the

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

Foreign-investment anxiety revealed in Lowy Poll

I've just written on the widespread antipathy in Indonesia to foreign investment, and how it is colouring the presidential election campaign. I attributed this hostility to the historical experience of colonialism. Now the Lowy Institute's annual poll reminds us that a similar (if less pronounced)

How to manage economic nationalism in Indonesia

Both Indonesian presidential candidates have taken a strongly nationalistic stance on foreign investment in their pre-election campaigning. When one of them takes office in October, will they be 'mugged by reality' and soften their stance? If not, how much does it matter? When Indonesia achieved

The other income-equality debate

Rock-star economist Thomas Piketty is getting headlines for his book on income distribution,  mainly focused on disparities within advanced economies. This might be the moment to ride the wave of attention and record something of the long-running parallel narrative on emerging economies. If

Why Australia needs an intelligence inquiry

I've already had the opportunity to argue that listening in on the wife of Indonesian president Susilo Bambang Yudhoyono (and the subsequent defence of these actions) is clear evidence that our intelligence people have lost that essential quality, their sense of judgment. I was struck by Allan Behm'

The three arrows of Abenomics: A report card

Today the Japanese value-added tax (VAT: what Australians call the GST) rises from 5% to 8%. This seemingly mundane event is a key part of the 'Abenomics' program, the effort to shake Japan out of its decades-long economic lethargy. So how does Abenomics look after 15 months? Exhibit 1 is the sharp

Why China is unlikely to have a 'Lehman moment'

Financial markets are worried about the Chinese financial sector, with some even talking about the possibility of a 'Lehman moment', which would set off a major financial meltdown, as occurred in America in 2008. This would be very serious not just for China but for the global economy. China still

A union with New Zealand for a larger Australia?

There are various possibilities for a Larger Australia. Michael Fullilove's path is to put more of our national resources into defence and diplomacy, as well as growing our population through increased migration and fertility, creating an Australia which walks taller on the world stage. A very

The Australian economy: How does it compare?

The meeting of the G20 finance ministers and central bank governors in Sydney next weekend provides an excuse to turn the spotlight inwards, towards the domestic economy. The IMF begins its new report on Australia this way: The Australian economy has performed well relative to many other

Hockey's speech and global monetary-policy spillover

In his speech at the Lowy Institute last week, Australian Treasurer Joe Hockey made a clear case for international policy coordination: 'in a globalised world every policy action taken in isolation has a spillover'. Specifically, this month's G20 meeting of finance ministers and central bank

What can be done about income inequality?

The income-inequality debate is an old one, but it’s getting renewed interest, most recently from President Obama in his State of the Union address, where he advocated raising the minimum hourly wage from $7.25 to just over $10. He also spoke of the closely related issue of social mobility (a '

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