Wednesday Lunch at Lowy - Julianne Schultz presentation
The world faces two creeping threats to its food supplies. On the one hand, expanding populations and the changing diets that accompany growing wealth have put greater strain on lagging gains in food production. On the other hand, climate change and environmental degradation are slowly contaminating food supplies and eroding agricultural productivity. At the Wednesday Lunch on 24 February, these issues were examined by Julianne Schultz, Editor of the Griffith Review, which has just published its newest edition, Food Chain. She was joined by Mark Thirlwell, Director of the Global Issues Program at the Lowy Institute, and Annmaree O’Keeffe, Research Fellow at the Lowy Institute, who have both written on these twin challenges to food security.
Their presentations can be heard here:
The challenges of food security - MP3 (21MB)
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| Lowy Institute Policy Brief |
Capital flows, the carry trade and 'sand in the wheels' The 'carry trade', in which capital shifts from countries with low interest rates to countries with significantly higher rates, has become an important element of international capital flows over the past decade. In a new Lowy Institute Policy Brief, Dr...
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| The year ahead |
Wednesday Lunch at Lowy - Research staff presentations On 3 February, at the first Wednesday Lunch at Lowy for 2010, three Lowy Institute scholars discussed where the world and our region are headed after a tumultuous year in 2009. Will things be calmer or more uncertain?
Mark Thirlwell, Program Director...
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Carry trade can harm recovering economies
In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville writes that a bounce back for the flow of international capital may not be good news.
Australian Financial Review, 22 February 2010, p. 23
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The global financial crisis: causes and consequences
This Working Paper, by Warwick McKibbin and Andrew Stoeckel, models the global financial crisis as a combination of shocks to global housing markets and sharp increases in risk premia of firms, households and international investors in an intertemporal (or DSGE) global model. The model has six sectors of production and trade in 15 major economies and regions. The paper shows that the shocks observed in financial markets can be used to generate the severe economic contraction in global trade and production currently being experienced in 2009.
The results show that the future of the global economy depends critically on whether the shocks to risk are expected to be permanent or temporary.
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A G-20 caucus for East Asia
In September 2009, the Pittsburgh Summit designated the G-20 as the world’s premier forum for international cooperation. The G-20 gives East Asia a significant presence at the top table of the world economy: six regional economies, including Australia, are members. This creates important new opportunities for the region. But making use of these opportunities requires significant increases in policy-making resources and in many Asian economies such resources are in short supply relative to the pressing problems they currently face. In a new Policy Brief, Stephen Grenville and Mark Thirlwell suggest that a caucus of the six East Asian members of the G-20 would provide an opportunity to pool resources for research and the preparation of policy papers on matters of common interest. This could help the region promote an agenda at the G-20 which would not only support regional interests, but would also assist in establishing the G-20’s relevance and keeping leaders engaged.
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Exception to the trend
In an article in The Australian, Mark Thirlwell, Program Director International Economy, discusses Chinese foreign investment in Australia.
The Australian, 24 September 2009, p. 3
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Why securitisation should secure a revival
In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville argues that securitisation can be revived, but it should be done with a great deal of care.
Australian Financial Review, 7 December 2009, p. 21
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Fixing the banks
In an article in the Review section of The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville examines the proposition of greater regulation of the financial sector.
Australian Financial Review, 27 November 2009, pp S1, S6
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Wednesday Lunch at Lowy - Mark Thirlwell presentation
Next month will mark the 20th anniversary of the fall of the Berlin Wall. This also makes it the 20th anniversary of the birth of the new global economy. At the Wednesday Lunch on 21 October, Mark Thirlwell, Director of the Institute’s international economy program, looked at some of the forces shaping the world economy during its first two decades: a period bookmarked at one end by the collapse of communism and the triumph of the market, and at the other by global financial crisis and the rise of state capitalism, and one which has included the Asian financial crisis, the dot-com bubble, the launch of the euro, the creation of the WTO, China’s emergence as a major global economic player, and the ascendancy of the G-20.
His presentation can be heard here:
The world economy at 20 - MP3 (17MB)
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Risk of failure helps keep banks honest
In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville writes that banks have added gaming-like functions to their essential core services.
Australian Financial Review, 9 November 2009, p. 20
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Lessons from Brazil's capital inflow tax
In an opinion piece in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville argues that the Brazilian approach to exchange rate pressures is a variant on an old theme.
Australian Financisal Review, 4 November 2009, p. 63
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The Great Crash of 2008
The Great Crash of 2008 took almost everyone by surprise although there were plenty of warning signs. Now, questions must be asked: what are the geo-economic and geo-strategic implications of such a wide-ranging crash, and how do we restore development in this changed world?
On 19 October, Professor Ross Garnaut AO appeared in conversation with Mr Ian Macfarlane AC to discuss the reasons for the downturn, from good, old-fashioned greed and rampant speculation, to the imbalances in global capital flows. The conversation also included the impact of the downturn on climate change, economic policy and ideology, and was chaired by Dr Michael Wesley.
The conversation can be heard here:
The Great Crash of 2008 - MP3 (21MB)
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Message to the G20: Defeating protectionism begins at home
On 16 November last year, G20 leaders made a commitment to resist protectionism. According to the World Bank, by the end of February 2009, seventeen of the twenty had already ‘implemented 47 measures whose effect is to restrict trade.’ When the leaders meet in Pittsburgh on 24 September 2009, they will have an opportunity to review their commitment and decide how best to strengthen it.
In a new Lowy Institute Policy Brief, Bill Carmichael, Saul Eslake and Mark Thirlwell argue that the advice that G20 leaders have received to date fails to deal with the underlying causes of protectionism. Protectionism results from decisions taken by governments at home, for domestic reasons. As a consequence, any effective response to protectionism needs to begin at home. The authors therefore propose that G20 leaders should sponsor domestic transparency arrangements in individual countries, in order to provide public advice about the economy-wide costs of domestic protection.
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Wednesday Lunch at Lowy - Professor Warwick McKibbin presentation
The United Nations Framework Convention on Climate Change (UNFCCC) process has focused on commitments of developed countries with an exclusive goal of emission reductions from historical base year emissions. However, these baseline emissions trend vary widely, and achieving similar targets can require very different efforts by different countries at different times. These differences have greatly hampered climate cooperation.
A copy of the new Brookings study can be obtained here.
His PowerPoint presentation can be downloaded here:
A Copenhagen price collar - PPT (134KB)
His presentation can be heard here:
A Copenhagen price collar - MP3 (20MB)
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Rebuilding Zimbabwe: Australia's role in supporting the transition
Last month marked the first anniversary of the 2008 power-sharing accord that resulted in the creation of a new unity government in Zimbabwe. In a new Lowy Institute Policy Brief, Joel Negin and Jolyon Ford assess what Australia can do to assist the country’s re-emergence.
In March 2009, Australia became the first major donor country to provide assistance to the new power-sharing government. Given the pervading influence of hardline elements in the new government, however, many still worry about the risks involved in providing external support. Negin and Ford argue that external assistance can help sustain momentum for reform in Zimbabwe and sustain public belief in a post-Mugabe era. They propose several areas where Australian aid can provide support to the country’s fragile recovery process, including through a focus on agriculture and food security.
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G20 needs to drive the adjustment process
In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville argues that a new, more ambitious Plaza Accord should be on table at the forthcoming Group of 20 leaders' meeting in Pittsburgh.
Australian Financial Review, 14 Septemebr 2009, p. 20
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A new climate strategy beyond 2012: lessons from monetary history
In this Perspective, based on the 2007 Shann Memorial Lecture, Professor Warwick McKibbin outlines the key features that are needed in a new climate change framework beyond Kyoto, drawing on lessons from monetary history. Using the analogy of the way modern central banks run monetary policy, it outlines an alternative to the Kyoto protocol which is a system of national climate policies coordinated around a common global price for carbon.
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External imbalances and the G20
In a new Policy Brief, Stephen Grenville argues that the Global Financial Crisis has changed the form of the external imbalances problem, but not removed it. Rather than see this as a bilateral issue, juxtaposing America’s unsustainable external deficit with China’s unsustainable surplus, the policy agenda should be broadened, to encompass ways of promoting globalisation rather than retreating from it. Next week’s G20 leaders’ meeting provides the forum for a more multilateral approach to policy coordination.
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Mass poverty in Asia and the GFC
In addition to the current Global Financial Crisis (GFC), there is a second global crisis: long-term poverty in the third world. While the rich world worries about a repeat of the Great Depression, today more than a billion people in Asia live in conditions of bitter poverty which are much worse than those of the 1930s. As a result of the GFC, poverty in developing Asia is now likely to increase. In a new Policy Brief, Peter McCawley argues that Australian economic diplomacy should place greater focus on the issue of mass poverty in Asia, and he emphasises the importance of strong economic growth as the best way to help Asia’s poor.
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G20 report on ABC2 News
Saul Eslake was interviewed on the ABC News Breakfast program about the issue of protectionism, recommending increased transparency as a way to moderate protectionist policy. Mr Eslake, together with International Economy program director Mark Thirlwell and Bill Carmichael, co-authored the new Lowy Institute Policy Brief "Message to the G20: Defeating protectionism begins at home".
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Excess bank reserves won't inflate system
In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville argues that the world's central banks can print money and still control inflation.
Australian Financial Review, 17 August 2009, p. 20
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Only unpopular reform will make system safer
In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville writes that politicians and taxpayers must get the recalcitrant financial sector into line.
Australian Financial Review, 20 July 2009, p. 20
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Wednesday Lunch at Lowy - Professor Robert Lawrence presentation
At the Wednesday Lunch at Lowy on 10 June, Professor Robert Lawrence of Harvard University spoke on the global financial crisis and international trade.
At precisely the time when coordinated global action is required to meet the GFC, there are worrying signs in the US and other leading economies of new forms of protectionism stemming from government stimulus and bailout packages. Professor Lawrence’s address focused on the impact of the global recession and how trade and cooperation will play prominent roles in the recovery.
His PowerPoint presentation can be downloaded here:
How will global trade fare post GFC? - PPT (233KB)
His presentation can be heard here:
How will global trade fare post GFC? - MP3 (20MB)
Video is also available.
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Distinguished Speaker Series - Dr David McCormick presentation
On 26 May, the Lowy Institute was pleased to host a speech in our Distinguished Speaker Series by Dr David McCormick, Distinguished Service Professor of Information Technology, Public Policy and Management at Carnegie Mellon University, on the current state of the world economy.
Dr McCormick's presentation, 'The global economy: how we got here and where we are headed' can be heard here:
The global economy - MP3 (20MB)
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International imbalances and international policy coordination
In a new Lowy Institute Perspective, Dr Stephen Grenville looks at the role of external imbalances and international capital flows in the global financial crisis. He argues that whether or not these imbalances were a major factor in explaining the current crisis, capital flows have often enough been associated with previous crises to demonstrate the need to put in place better financial infrastructure to link countries with surplus savings with the countries that have the best opportunities to use these savings. Dr Grenville suggests that this would be an appropriate challenge for the G-20 Leaders.
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No need to fear rates this time
In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville writes that markets expect interest rates to rise next year but that doesn't mean inflation is about to take off.
Australian Financial Review, 15 June 2009, p. 20
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Theory has failed: our hope is the real world
In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville looks at economics after the financial crisis.
Australian Financial Review, 11 May 2009, p. 20
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Wednesday Lunch at Lowy - Warwick McKibbin presentation
At the Wednesday Lunch at Lowy on 8 April 2009, Professor Warwick McKibbin explored how well the global financial crisis can be understood as a series of unexpected shocks, what these shocks were and how conventional economic models explain the global adjustment and the implications of alternative policy responses.
His PowerPoint presentation is available here:
GFC: Cause and consequences - PPT (927KB)
His presentation can be heard here:
GFC: Cause and consequences - MP3 (21MB)
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Refining the G-20 agenda
The G-20 Leaders will meet in London in April, faced by the most serious economic downturn for seventy years. The London agenda bears two heavy burdens. First, financial markets are expecting a confidence-boosting rabbit to be pulled out of the international policy hat, and no such magic trick exists. Second, the agenda has become the repository of all the ideas to make the world a better place, ranging from poverty alleviation to climate control. In a new Lowy Institute Policy Brief, Visiting Fellow Stephen Grenville makes some suggestions for the meeting's agenda.
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Wednesday Lunch at Lowy - Donghyun Park and Craig Sugden presentations
With much of the developed world in recession, Asia's economies are suffering as exports crumble, capital flows reverse, and business and consumer confidence deteriorates.
The ADB's Senior Economist Donghyun Park addressed these issues within the context of the Asian Development Outlook 2009, ADB's flagship economic publication.
Rebalancing Asia's Growth - PPT (2MB)
ADB Country Economist Craig Sugden presented highlights of the Pacific portion of the report and discussed the policy options available to the region to minimise the impacts of the global economic crisis.
Pacific Member Countries - PPT (257KB)
Their presentations can be heard here:
Asian Development Outlook - MP3 (19MB)
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Don't blame China for the economic downturn
Lowy Institute visiting fellow Stephen Grenville argues that the international financial system should link nations seeking investment with those which have accumulated savings, to provide a buffer against future global financial crises.
Australian Financial Review, 27 April 2009, p. 20
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Towards the London Summit: Next steps for the G-20
On 5 March 2009, the Lowy Institute hosted a roundtable discussion in the run-up to the G-20 meeting of world leaders that will be held in London on 2 April this year. The roundtable was supported by the British High Commission in Canberra and was part of the British Government's efforts to reach out to the wider community for ideas before this critical summit meeting. The discussion brought together a small group of informed Australians from outside government to give their views. The roundtable was held under the Chatham House Rule, but the Institute has produced an outcomes report, summarising the discussion. The outcomes report is available here.
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What the G-20 wants back
Lowy Institute Director of Studies, Andrew Shearer and Program Director International Economy, Mark Thirlwell contributed to an online forum of The Chicago Council on Global Affairs and The Managing Global Insecurity project out of The Brookings Institution on the topic, 'What the G-20 wants back'. All of the contributions to the forum can be read at: http://www.thechicagocouncil.org/taskforce_details.php?taskforce_id=13
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All change or plus ça change
It's now common to hear the claim that the global financial crisis will fundamentally change the world economy. In a new paper in the Lowy Institute's Perspectives series, Mark Thirlwell asks whether the changing facts about the world economy - plummeting growth, soaring risk aversion, collapsing commodity prices, and a massive expansion in the role of government – are so significant that we have to change our minds about the fundamental ways in which the world now works.
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Is Australia's foreign investment regime in the national interest?
In a paper written for an IPA conference on Australia's Investment Future, the Institute's Andrew Shearer and Mark Thirlwell take a look at the politics and economics of Australia’s foreign investment regime. They examine the extent to which the regime is adequate to safeguard the national interest in the context of Chinese investment in the Australian resource sector. Their conclusion is that there is no need to panic, either about the influx of Chinese investment, or about the restrictiveness of the current regime when it comes to foreign direct investment, although they do argue that some further liberalisation is warranted.
Their paper is available for download here.
The full list of papers delivered at the IPA conference is available here: http://www.ipa.org.au/sectors/australia%27s-open-investment-future-symposium
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Paul Keating speech
On 5 March 2009, the Lowy Institute hosted a roundtable discussion in the run-up to the G-20 meeting of world leaders to be held in London on 2 April this year. The roundtable was supported by the British High Commission in Canberra and was part of the British Government's efforts to reach out to the wider community for ideas before this critical summit meeting. The forum was addressed by the Hon. Paul Keating who analysed the opportunity offered by the London Summit to reshape the global order.
His speech can be heard here:
Towards the London Summit - MP3 (12MB)
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The economic and environmental effects of border tax adjustments for climate change policy
For the foreseeable future, climate change policy will be considerably more stringent in some countries than in others. In high-cost countries, there will be political pressure to impose border adjustments, or 'green tariffs', on imports from countries with little or no climate policy and low energy costs. In this paper, the authors estimate how large such border tax adjustment tariffs would be in practice, and then examine their economic and environmental effects using G-Cubed, a detailed multi-sector, multi-country model of the world economy. They find that the tariffs would be small on most traded goods, would reduce leakage of emissions reduction very modestly, and would do little to protect import-competing industries. They conclude that the benefits produced by border adjustments would be too small to justify their administrative complexity or their deleterious effects on international trade.
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Animal spirits tamed in forlorn US
In an opinion piece in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville asks why the brakes are on in the US economy while zero interest rates should be putting a rocket under demand.
Australian Financial Review, 2 March 2009, p. 55
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Increase IMF capacity, replace its uselsss bosses
In an opinion piece in the Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville argues that Australia should seek deeper reform of the International Monetary Fund.
Australian Financial Review, 23 February 2009, p. 20
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Wednesday Lunch at Lowy - Mark Thirlwell presentation
If 2008 was the year of the financial crisis, 2009 is set to be the year of the real economy fallout. According to the latest IMF projections, world economic growth is set to fall to its lowest rate since the Second World War. World trade is contracting. Capital flows to emerging markets are drying up. Commodity prices have crashed. Unemployment is climbing. Public protests are on the rise and governments have started to topple.
In the Wednesday Lunch at Lowy on 18 February, Mark Thirlwell, Director of the Institute's International Economy program, looked at how the world economy will cope with what's turning into its biggest stress test in decades.
His presentation, Risks, riots and recessions: The world economy in 2009, is available here:
Risks, riots and recessions - MP3 (23MB)
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Australian aid to Africa
As part of its commitment to increase spending on overseas development assistance, the Australian government has announced a substantial re-engagement with Africa. Despite the anticipated increase in funding, however, Australia will still be a small player in Africa's crowded development community. In a new Policy Brief, Joel Negin and Glenn Denning propose that, in order to ensure its engagement with Africa is as meaningful as possible, Australia should leverage areas of shared challenges between Australia and Africa where Australia's experience and expertise enable it to make strategic and mutually beneficial contributions. To this end, Negin and Denning argue that Australia should focus its African development program on sustainable agriculture and renewable energy.
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Urgent need for new international forum
In an opinion piece on the international financial crisis in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville argues that much needs to be resolved if big nations are to shrink their imbalances smoothly.
Australian Financial Review, 7-8 February 2009, p. 62
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In this financial crisis, we still need Davos Man
In an opinion piece in The Sydney Morning Herald, Mark Thirlwell, Program Director International Economy, mounts a defence for Davos Man, whose reputation has taken a beating from the global financial crisis. While noting that the captains of finance and industry have been humbled by bankruptcies and bailouts, Mark argues that gatherings such as those of the World Economic Forum in Davos, Switzerland, serve a useful role as a vaccine against rising economic nationalism.
Sydney Morning Herald, 30 January 2009, p. 11
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Five problems to fix in a flawed policy
In an opinion piece in The Australian Financial Review, Lowy Institute Professorial Fellow Warwick McKibbin argues that the government's climate change policies are fixable.
Australian Financial Review, 15 January 2009, p. 47
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Australia, East Asia and the current financial crisis
In a new Analysis, Dr Stephen Grenville argues that as the international crisis begins to impinge more strongly on Asia, one of the potential protective responses – the Chiang Mai Initiative – needs some tweaking to make it politically acceptable for countries which need it. Australia might be able to offer some low-key support here and could use the opportunity to participate more fully.
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Expecting the unexpected
To estimate the emissions reductions and costs of a climate policy, analysts usually compare a policy scenario with a baseline scenario of future economic conditions without the policy. Both scenarios require assumptions about the future course of numerous factors such as population growth, technical change, and non-climate policies like taxes. The results are only reliable to the extent that the future turns out to be reasonably close to the assumptions that went into the model.
In this Working Paper the authors examine the effects of unanticipated macroeconomic shocks to growth in developing countries or a global financial crisis on the performance of three climate policy regimes: a globally-harmonised carbon tax; a global cap and trade system; and the McKibbin-Wilcoxen hybrid.
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Go beyond doctrine for a way out of this mess
In an article in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville lays out the route from crisis to financial reform.
Australian Financial Review, 8 December 2008, p. 23
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Wednesday Lunch at Lowy - Mark Thirlwell presentation
At the Wednesday Lunch at Lowy on 29 October, Mark Thirlwell, Director of the Institute's International Economy program, looked at the resumed battle for the Commanding Heights of the world economy, and asked whether the apparent victory for the free market secured in the 1980s and 1990s is now about to be overturned in favour of the state.
His presentation can be heard here:
The end of the free market? - MP3 (20MB)
The Monthly's SlowTV hosts a video of this presentation here.
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Wednesday Lunch at Lowy - Dr Marcus Noland presentation
On 1 October 2008, Dr Marcus Noland, Senior Fellow at the Peterson Institute for International Economics, spoke about North Korea and how its nuclear ambitions and geographic position draw the attention of the other powers in Northeast Asia.
His PowerPoint presentation is available here:
North Korea opens - PPT (4MB)
His presentation, entitled 'North Korea opens', can be heard here:
North Korea opens - MP3 (21MB)
The Monthly's SlowTV hosts a video of this presentation here.
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Lenders of last resort may well lose balance
In an opinion piece in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville argues that saving the banks and their shadows has not solved the deeper problem of the financial system.
Australian Financial Review, 27 October 2008, p. 25
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Into the crisis, enter the dragon
In an opinion piece in the Herald-Sun, International Economy Program Director Mark Thirlwell writes that while Australians may be concerned about some of the implications of China's economic rise, including the challenges posed by a wave of state-controlled foreign investment into the resource sector, a key lesson from the current crisis is that the world is much better off with a strong Chinese economy than with a weak one.
Herald-Sun, 6 October 2008, p. 19
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Into Africa
The international resource boom has spurred a hunt for new mineral and hydrocarbon reserves, and an important new frontier in this search is Sub-Saharan Africa (SSA). Australian resource companies are now spending tens of billions of dollars on exploration and development, and engineering and service companies are clinching billions of dollars of contracts, across SSA. In a new Lowy Institute Paper, Roger Donnelly and Benjamin Ford describe how Africa now matters much more to corporate Australia, assess the drivers and dimensions of the SSA resource boom, and examine some of the implications for Australian companies and Australian public policy.
To order a hard copy of this publication click here.
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Stephen Grenville opinion piece
In an opinion piece in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville argues that getting the foreign investment rules right is the best way to deal with sovereign wealth funds.
Australian Financial Review, 20 September 2008, p. 23
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Sovereign wealth funds conference
The Lowy Institute for International Policy, together with the Centre for Applied Macroeconomic Analysis at ANU, hosted a major international conference in Sydney on 25 and 26 September 2008. The conference theme was: 'Sovereign Wealth Funds in an Evolving Global Financial System'.
Shown in photograph: David Vines
More information and conference presentations are available from the Centre for Applied Macroeconomic Analysis at: http://cama.anu.edu.au/swf2008.asp#program
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Wednesday Lunch at Lowy - Roger Donnelly and Benjamin Ford presentations
On 13 August at the Wednesday Lunch at Lowy, the authors of a new Lowy Institute Paper on the importance to Australia of the resources boom in Sub-Saharan Africa, Roger Donnelly and Benjamin Ford, launched their Paper, entitled 'Into Africa'.
Their presentation can be heard here:
Into Africa - MP3 (17MB)
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Big profits, losses out of Africa
Roger Donnelly and Ben Ford, authors of a new Lowy Institute Paper entitled 'Into Africa: how the resource book is making Sub-Saharan Africa more important to Australia', explain the significance of Australian resource companies' investment in Sub-Saharan Arica.
A version of this piece was published in
The Australian Financial Review, 13 August 2008, p. 63
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After Doha: the search for Plan B
The Doha round of world trade talks has collapsed. After the negotiations were suspended back in July 2006, Mark Thirlwell wrote that – regardless of the ultimate outcome of the Round – the era of giant, set-piece trade negotiations like Doha and its predecessor, the Uruguay Round, was over. The world would therefore have to search for a Plan B for international trade. In the short term, the most likely Plan B on offer would be a further turn to regional and bilateral trade arrangements. But in the longer term, reform of the multilateral system would be required. The same assessment holds today.
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Blog post on Doha Round collapse
Mark Thirlwell writes on the 29 July failure in world trade talks for the Lowy Institute blog, The Interpreter, here.
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Reform a balancing act for Indonesians
In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville writes that Indonesia is quietly making progress, but could benefit from friendly advice and encouragement.
Australian Financial Review, 28 July 2008, p. 23
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Foreign investment in Australia and China
A surge in Chinese investment into Australia's resource sector has been making headlines in recent weeks. On 4 July, in conjunction with the Australia China Business Council and Monash University, the Lowy Institute participated in a forum on The Changing Global Financial Environment: Implications for Foreign Investment in Australia and China. The forum, which was also addressed by the Federal Treasurer, the Hon Wayne Swann MP, covered several topical policy issues including the evolving international financial environment; the rise of sovereign wealth funds and state-owned enterprise foreign investment; foreign investment in the Australian resource sector during the current resources boom; and growing Chinese outward investment and the Australia-China relationship. For more information about the conference, please see the Outcomes Report.
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Global changes challenge Canberra's dealings with Beijing
In a piece in the Business section of The Australian newspaper, Mark Thirlwell takes a look at the policy challenge raised by the ongoing surge of Chinese investment into the Australian resource sector.
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Building on Kyoto: towards a realistic global climate agreement
Although the Kyoto Protocol has not been effective at reducing emissions, it has been very effective at demonstrating a few important lessons about the form future international climate agreements should take. As negotiations begin in earnest on a successor agreement to take effect in 2012, it is important to learn from experience with the Kyoto Protocol in order to avoid making the same mistakes over again and to design a more durable post-2012 international agreement. This paper presents the lesson learnt from the Kyoto Protocol and proposes a way forward for the post- Kyoto negotiations. It also offers some empirical results for the global consequences of a cap and trade emissions markets, a global carbon tax and the McKibbin Wilcoxen Hybrid emissions market approach.
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China can grow and still help prevent the tragedy of the carbon dioxide commons
Under reasonable assumptions, China could achieve parity in living standard with Western Europe by 2100, and India by 2150. Climate change, however, may be a key obstacle preventing such a convergence. This paper uses a dynamic multi-country model (the G-Cubed Model) to project a realistic BAU trajectory of CO2 emissions for China, and we find it to be even above the CO2 emissions from the high-growth scenario estimated by the Energy Information Agency in 2007. This outcome is a reminder that it has been usual so far to underestimate the growth in China energy consumption. The paper then compares the merits of the different market-based CO2 reduction mechanisms in China like a carbon tax, a cap-and-trade emissions trading scheme, and the McKibbin-Wilcoxen Hybrid (MWH) emissions trading approach.
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Building on Kyoto
Lowy Institute Professorial Fellow Warwick McKibbin delivered a public lecture at the Australian National University on 3 July 2008. The lecture was entitled 'Building on Kyoto: Towards a Realistic Global Climate Agreement and What Australia Should Do'.
The lecture can be heard at: http://www.anu.edu.au/discoveranu/content/podcasts/building_kyoto/
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Right direction, wrong policy
In an opinion piece in The Australian Financial Review, Lowy Institute Professorial Fellow Warwick McKibbin argues that Garnaut's model for an emissions trading system neglects the international picture and has highly uncertain costs.
Australian Financial Review, 7 July 2008, p. 63
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Green goals with long aim
In an opinion piece in The Canberra Times, Professor Warwick McKibbin argues that Australia is now at a critical point in designing a climate-policy framework that will not only have a large impact on the future shape of the Australian economy but could also drive the global debate on what policies should be in a post- Kyoto world.
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What does a free-trade area of the Asia-Pacific mean to China
A Free Trade Area of the Asia-Pacific (FTAAP) has been proposed as a long-term prospect by the Asia-Pacific Economic Cooperation (APEC). This Working Paper by Tingsong Jiang and Warwick McKibbin examines the impact of the FTAAP on the national and regional economies in China using a suite of general equilibrium models: APG-Cubed, a dynamic global model; GTAP, a static global model; and CERD, a static China model with regional dimension.
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Indonesia's glass is more than half full
In an opinion piece in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville argues that Kevin Rudd's coming trip to Jakarta highlights our opportunity to ride the reformist wave there.
Australian Financial Review, 2 June 2008, p. 23
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Wednesday Lunch at Lowy - Professor Peter McDonald presentation
The world economy is now characterised by intense international competition for skilled immigrants. At the Wednesday Lunch at Lowy on 21 May, Professor Peter McDonald considered how Australia can recruit the migrants that it needs and what the potential obstacles may be.
Peter McDonald is Professor of Demography and Director of the Australian Demographic and Social Research Institute at the Australian National University.
His presentation is available here in PowerPoint:
The global battle for skilled workers - PPT (150KB)
His presentation, 'Can Australia win in the global battle for skilled workers?' can be heard here:
The global battle for skilled workers - MP3 (19MB)
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Asian region faces political pressures from rising inflation
Voice of America article on rising inflation from fuel and food costs and the political pressure it exerts on all Asian governments. Mark Thirlwell discusses the pressure on governments to cut fuel subsidies in the face of growing budget deficits.
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Wednesday Lunch at Lowy - Mark Thirlwell presentation
The first global economy ended in fire and destruction with World War One. A new global economy was born with the fall of the Berlin Wall. Key features included the explosive growth of private capital flows, the Washington Consensus, and the IMF as crisis manager.
A new, new global economy may now be emerging from the rubble of the subprime crisis. To date, key features include the explosive growth of state-controlled capital flows, the Beijing consensus, and emerging market-led bailouts of Wall Street.
In the latest in our Wednesday Lunch at Lowy series, Mark Thirlwell, Director of the Institute's International Economy program, described how the international economic order hasn't turned out quite the way the West thought it would.
Mark's presentation can be heard here:
Welcome to the new, new global economy - MP3 (16MB)
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Past errors can't be rubbed out
In an article in the Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville argues that too many proposals to deal with the sub-prime liquidity crisis are based on improving the wrong kind of liquidity.
Australian Financial Review, 12 May 2008, p. 23
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Securitisation failures put spotlight on central banks
In an opinion piece in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville examines what went wrong with financial sector regulation.
Australian Financial Review, 7 April 2008, p. 25
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Crisis reveals need for new regulatory mindset
In this opinion piece in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville spells out the reforms needed in financial sector regulation.
Australian Financial Review, 14 April 2008, p. 25
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Distinguished Speaker Series - The Hon. Simon Crean MP presentation
On 28 February, the Lowy Institute hosted a speech by The Hon. Simon Crean MP, Minister for Trade. On the occasion this year of the sixtieth anniversary of the founding of the GATT/WTO system, the Minister reviewed Australia's role in the multilateral trade regime and emphasised the critical importance of successfully concluding the Doha Round. He also used the occasion to outline the new Government's approach to trade policy in his presentation, 'Australia and the multilateral trade system: seizing the opportunities'. His speech can be read at http://www.trademinister.gov.au/speeches/2008/080228_lowy.html.
His presentation is available here:
Australia and the multilateral trade system - MP3 (20MB)
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Food and the spectre of Malthus
In an opinion piece in the Financial Times, International Economy Program Director Mark Thirlwell writes on global food shortages and rising food prices.
Financial Times, 27 February 2008, p. 11
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Central banks and capital flows
Sudden capital outflows were at the heart of the 1997-8 Asian Crisis. Ten years later, capital flows are back on the policy agenda, but in a very different context. The countries of East Asia are now getting more inflows than they can effectively absorb and the upward pressure on exchange rates is unwelcome.
These issues are discussed in this paper, 'Central banks and capital flows', by Dr Stephen Grenville, in the Lowy Institute's Working Paper in International Economics series.
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Crunched: Lessons from the 2007 TLA crisis
In a paper in the Lowy Institute Perspectives series, Mark Thirlwell looks at the current turmoil in international financial markets. While this is often named after the US subprime sector in which it originated, he suggests that an alternative description could be the TLA crisis, given the profusion of three letter acronyms such as MBS, CDO and SIV deployed in any analysis of developments. Mark argues that recent events tell us something important about the current financial system and its vulnerability to crisis, and provide some significant lessons for regulators and central banks.
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Sovereign wealth funds only part of the debate
In this opinion piece in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville argues that Australia should push its own agenda on foreign investment.
Australian Financial Review, 11 February 2008, p. 23
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We must add voice to sovereign funds debate
In an opinion piece in The Australian Financial Review, Visiting Fellow Stephen Grenville writes that the growth of state-run investment giants raises issues for Australia.
Australian Financial Review, 3 December 2007, p. 23
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Election debate
On 31 October, the Lowy Institute hosted an election debate between the Trade Minister, the Hon. Warren Truss, and the Shadow Trade Minister, the Hon. Simon Crean. Both speakers reaffirmed their belief that the WTO Doha Round could still deliver a global deal and presented their parties' different views on bilateral trade deals, including the ongoing negotiations with Japan and the potential for an Australia-South Korea deal in the future. The Trade Minister also used the debate to outline the Coalition's new trade policy. For more information on trade policy and the next government, please see the Lowy Institute Voters' Guide: http://www.lowyinstitute.org/Publication.asp?pid=683.
The debate can be heard here:
Setting Australia's trade policy - MP3 (22MB)
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Global environmental policy
The Lowy Institute Voters' Guide to International Policy addresses the sort of questions we should be putting to our political leaders.
Section 9 of the Guide, 'Global Environmental Policy', by Professorial Fellow Warwick McKibbin, is available here.
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When the going gets tough, rules start going
In this opinion piece in The Australian Financial Review, Stephen Grenville argues that there are some urgent lessons to be learned from the sub-prime problems.
Australian Financial Review, 29 October 2007, p. 23
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All talk and very little effectual global action
It's time for the IMF to admit its mistakes and trim back its mission creep, writes Lowy Institute Visiting Fellow Stephen Grenville in an opinion piece in the Australian Financial Review.
Australian Financial Review, 15 October 2007, p. 27
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The international economy
The Lowy Institute Voters' Guide to International Policy addresses the sort of questions we should be putting to our political leaders.
Section 3 of the Guide, 'The International Economy', by Mark Thirlwell, Program Director International Economy, is available here.
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Wednesday Lunch at Lowy - Malcolm Cook and Mark Thirlwell presentations
At the Wednesday Lunch on 24 October, the Lowy Institute's Malcolm Cook and Mark Thirlwell discussed the economic future of the big five economies of Southeast Asia. A decade on from the financial crisis finds policymakers in the region's richer economies struggling with a series of important questions. Drawing on a recent research trip to the region, Malcolm and Mark considered some of the key economic policy challenges facing the region and assessed the nature of the response to date.
Their presentations are available here:
Stuck in the middle? The economic future of Southeast Asia - MP3 (18MB)
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More second thoughts
Earlier this year in Lowy Institute Paper 18, 'Second thoughts on globalisation', Mark Thirlwell looked at how the globalisation-powered rise of China and India was disconcerting some in the developed world, and prompting a re-evaluation of the costs and benefits of globalisation. This Lowy Institute Analysis looks at how this process has evolved since the earlier Paper was written.
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Wednesday Lunch at Lowy - Christopher Langman presentation
On 10 October at the Wednesday Lunch at Lowy, Christopher Langman discussed the current state of play in the WTO Doha Round of trade negotiations. He considered some of the factors that have made the current negotiations so complex and difficult, and outlined the potential implications for the multilateral trading system.
Christopher Langman is currently the head of the Office of Trade Negotiations in the Department of Foreign Affairs and Trade, with particular responsibility for Australia's participation in the WTO. Earlier, he was Australia's Special Negotiator for Agriculture and before that the Ambassador for the Environment. He has served at the Australian missions in Geneva, Washington and Buenos Aires.
His presentation can be heard here:
The WTO Doha Round: Where is it going? - MP3 (18MB)
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Distinguished Speaker Series - Mr Haruhiko Kuroda speech
On 13 September as part of our Distinguished Speaker Series, Mr Haruhiko Kuroda, the President of the Asian Development Bank (ADB) and the Chairperson of the ADB's Board of Directors, presented a lecture to the Lowy Institute. Headquartered in Manila, the ADB is the regional multilateral financial institution tasked with reducing poverty in the Asia Pacific region.
The title of Mr Kuroda's lecture was 'Economic prospects, challenges, and regional cooperation in Asia and the Pacific'. He discussed the economic success of developing Asia and outline the ADB's views on regional cooperation and integration.
His presentation can be heard here:
Economic prospects in Asia Pacific - MP3 (22MB)
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Lack of liquidity is not the sub-prime problem
In this opinion piece, Lowy Institute Visiting Fellow Stephen Grenville argues that there is more at stake in the so-called liquidity crisis than its popular description might lead us to believe.
Australian Financial Review, 2 October 2007, p. 25
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Ten years after the Asian Crisis
In a new Lowy Institute Analysis, Dr Stephen Grenville looks back at the decade-old Asian financial crisis in search of insights on current vulnerabilities. Dr Grenville argues that while there is little chance of any repeat of 1997-98 any time soon, at some point in the future the core vulnerabilities of the crisis period will re-emerge: volatile capital flows and fragile financial markets. Moreover, if the future does hold another sudden stop capital reversal, the IMF has neither the resources nor the procedures to act as an effective lender of last resort. Worse, the Fund lost credibility in the region during the crisis, which means that countries will be slow and reluctant to draw on its assistance.
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G-20 the right tool to balance world's books
In this article in the Australian Financial Review, Stephen Grenville writes that the sub-prime crisis in the United States could lead to a risky realignment of the global economy.
Australian Financial Review, 10 September 2007, p. 25
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Distinguished Speaker Series - Mr John Lipsky presentation
On 31 July, as part of the Lowy Institute's Distinguished Speaker Series, John Lipsky, First Deputy Managing Director of the International Monetary Fund, spoke on financial market globalisation. The explosive growth in international capital flows has helped to underpin the current historic phase of global growth. These flows have also raised concerns, however, that they have created novel strains that accentuate the risks of future financial market disruptions. As a result, policymakers have been called on to take steps to ensure that adverse outcomes can be avoided. Mr Lipsky assessed these developments, and discussed possible measures that could mitigate the risks of such adverse outcomes.
Financial market globalisation - MP3 (21MB)
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Wednesday Lunch at Lowy - Dr Stephen Grenville presentation
On 11 July at the Wednesday Lunch at Lowy, Dr Stephen Grenville addressed the questions: As international capital flows back into the Asian region's economies, is the region now seeing old vulnerabilities re-emerge? And has the IMF learned the right lessons from history?
His presentation was entitled 'Ten years after the Asian Crisis: Is the International Monetary Fund ready for the Next One?'
You can listen to this presentation at:
Ten years after the Asian Crisis - MP3 (17MB)
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Second thoughts on globalisation
For more than two decades, policymakers in much of the world have pursued pro-globalisation polices. The result has been a wealthier and more dynamic global economy. Yet today, significant parts of the developed world are having second thoughts about the benefits of globalisation, with many of the doubts prompted by the globalisation-powered rise of China and India. As policymakers and businesses across the rich countries grapple with the consequences of the economic re-emergence of the two Asian giants, this latest Lowy Paper from Mark Thirlwell analyses the growing pressures on governments to temper the forces driving globalisation.
To order a hard copy of this publication click here.
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Tigers who develop too fast for comfort
In this opinion piece for The Australian, Mark Thirlwell describes how the economic success of China and India is prompting some second thoughts about the future of globalisation.
The Australian, 14 June 2007
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Enhancing transparency in the multilateral trading system
On 4 July, the Lowy Institute, in cooperation with the Tasman Transparency Group, hosted a conference on Enhancing Transparency in the Multilateral Trading System. Drawing on experience in Australia and elsewhere, the conference examined the role of greater domestic transparency in enhancing the effectiveness of multilateral trade negotiations. The conference brought together an impressive array of speakers, including the Australian Trade Minister, the Hon Warren Truss, the New Zealand Shadow Trade Minister and former WTO negotiator for New Zealand, Tim Groser, and leading policy analysts from the United States, Indonesia, and Australia.
Copies of the papers presented at the conference are available for download.
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Second Thoughts on Globalisation
Ali Moore interviewed Mark Thirlwell on Lateline Business on 13 June. The theme of the interview was Mark's recent Lowy Paper, Second Thoughts on Globalisation. You can watch the interview at the ABC Lateline Business web site, http://www.abc.net.au/lateline/business/items/200706/s1950678.htm
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Asians must spend more on basic infrastructure
In this opinion piece for The Australian Financial Review, Stephen Grenville discusses how ASEAN nations are still hurting in the aftermath of 1997's economic crisis.
The Australian Financial Review, 18 June 2007, p. 23
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Sensible climate policy
The release of the report by the Prime Ministerial Task Group on Emissions Trading has received a lot of attention. The broad philosophy of that report is based on the McKibbin-Wilcoxen Blueprint, an approach developed by the Lowy Insitute's Professorial Fellow, Warwick McKibbin and Professor Peter Wilcoxen of Syracuse University. The approach was developed for the Australian policy community in the February 2005 Lowy Institute Issues Brief, 'Sensible Climate Policy'.
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Wednesday Lunch at Lowy - Professor Warwick McKibbin presentation
On 6 June, at the Wednesday Lunch at Lowy, Professor Warwick McKibbin provided a preliminary assessment of the report released on 1 June by the Prime Ministerial Task Group on Emissions Trading. This joint government-business task group was established by the Prime Minister on 10 December 2006 with a mandate to advise on the nature and design of a workable global emissions trading system in which Australia would be able to participate.
His presentation is available here in PowerPoint:
The Prime Ministerial Task Group on Emissions Trading - PPT (360KB)
His presentation can be heard here:
The Prime Ministerial Task Group on Emissions Trading - MP3 (20MB)
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Blueprint for a flexible, sensible climate policy
In this opinion piece in The Australian, Warwick McKibbin suggests ways both main parties can integrate recommendations on emissions trading into their platforms.
The Australian, 5 June 2007, p. 12
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From national to international climate change policy
In the Sir Leslie Melville Lecture entitled 'From National to International Climate Change Policy', Professor Warwick McKibbin argues that major countries must respond to the issue of climate change, taking into account the enormous uncertainties that are involved. He discusses the key features of the climate change policy problem and outlines what is required in a policy framework that would allow an effective but flexible response to curbing greenhouse gas emissions both nationally and globally.
He also addresses the issue of whether there is an economic case for Australia to lead the world in the design and implementation of a market-based approach before a global system is implemented. It is argued that starting with a series of national systems which are coordinated across countries to create a global system is the only sensible way forward on climate change policy.
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China tipping scales of global imbalance
In this opinion piece in the Australian Financial Review, Stephen Grenville argues that China's trade, currency and interest rate regimes are not sustainable.
Australian Financial Review, 4 June 2007, p. 21
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Australia and New Zealand in a globalising world
The fourth annual Australia-New Zealand Leadership Forum was held in Sydney on 22 and 23 April this year. The Lowy Institute's Executive Director, Allan Gyngell, and the Director of the International Economy program, Mark Thirlwell, together with the founding Chief Executive of the New Zealand Institute, David Skilling, spoke to the forum on the challenges posed to both economies by globalisation's successes and its failures. Their presentation is now available as part of the Lowy Institute's Perspectives series.
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Deciding the 'property rights' of emissions
In this opinion piece, Stephen Grenville writes that the Business Council has been quick to outline its policy on carbon emissions, but we need to consider the equity implications of greenhouse emissions trading.
Australian Financial Review, 21 May 2007, p. 23
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Wednesday Lunch at Lowy - Mark Thirlwell presentation
On 4 April, at the Wednesday Lunch at Lowy, Mark Thirlwell, Director of the Institute's International Economy Program, discussed his forthcoming Lowy Institute Paper, 'Second thoughts on globalisation: can the developed world cope with the rise of China and India?'
His presentation is available here in PowerPoint:
Second thoughts on globalisation - PPT (277KB)
Mark's presentation can be heard here:
Second thoughts on globalisation - MP3 (19MB)
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IMF needs much more than a nip and tuck
In this opinion piece in the Australian Financial Review, Stephen Grenville argues that the International Monetary Fund is still a long way from being reformed.
Australian Financial Review, 23 April 2007, p. 27
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Between intensive care and the crematorium
In October 2006, Mark Thirlwell presented a paper at a dialogue on 'WTO at crossroads? Experiences and expectations around the Doha Agenda'. The dialogue was held in Singapore and conducted by the Friedrich Ebert Stiftung Office and the WTO Secretariat. The meeting brought together some 40 academics, officials from trade ministries and the WTO secretariat, civil society and trade union representatives from the region. A copy of Mark's paper was published in the Friedrich Ebert Stiftung's Dialogue and Cooperation series, and is now available for download.
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Two issues in carbon pricing: timing and competitiveness
This Working Paper in International Economics by David Pearce and Warwick McKibbin explores two issues that have emerged in recent policy discussions on the need for price signals to encourage efficient abatement of greenhouse gases.
The first is the question of the timing of a price signal, in particular whether the signal should be introduced 'early', or whether it would be more appropriate to first subsidise R&D — and so lower the cost of abatement — before introducing a price signal. The second question is whether, and how, Australia could 'compensate' for trade effects (or a loss of 'competitiveness' that could be experienced by particular industries) if Australia did introduce a significant carbon price signal before such a signal was introduced by our trading partners.
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Loose use of liquidity just confuses the issue
In this opinion piece in the Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville argues that the concept of international liquidity is frequently used loosely, and in too many different ways, to be analytically useful.
Australian Financial Review, 26 March 2007, p. 23
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International liquidity
In this new paper in the Perspectives series, Visiting Fellow Stephen Grenville argues that the term 'liquidity' has too many meanings for it to be analytically useful.
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Quiet boom
After fifteen years of uninterrupted growth, Australia's quiet economic boom shows no signs of ending. The longest expansion in Australian history, it has seen wealth more than double, average income increase by half as much again, and unemployment tumble to a rate last experienced more than quarter of a century ago. A new Lowy Institute Paper by Dr John Edwards, chief economist for HSBC Bank for Australia and New Zealand, takes a close look at this long upswing.
The Paper asks where this quiet boom came from, what its characteristics are, how enduring it may prove to be, how it is changing Australia and Australia's place in the world, what it means for Australians and Australia's place in the world economy, and where it is now headed.
To order a hard copy of this publication click here
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Globalisation and capital flows
In this Lowy Institute Perspective, Stephen Grenville argues that volatile international capital flows are once again becoming a problem for emerging market economies.
These countries would be in a stronger position to manage these flows if the “international financial architecture” – the rules, procedures and understandings that surround international financial flows – were strengthened to endorse Chilean-style short-term capital inflow controls, and to improve the international crisis management measures.
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For inflation fighters, money just doesn't rate
In this opinion piece, Lowy Institute Visiting Fellow Stephen Grenville writes that economists are again debating the role of money in monetary policy.
Australian Financial Review, 19 February 2007, p. 23
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Wednesday Lunch at Lowy - Lowy Institute Scholars presentation
At the Wednesday Lunch at Lowy on 7 February, the Lowy Institute's scholars discussed what we should be keeping an eye out for in international policy in 2007.
Dr Michael Fullilove, the Program Director for Global Issues, discussed global trends and the United States. Mark Thirlwell, the Program Director for the International Economy, discussed some of the big questions facing the global economy in 2007. Anthony Bubalo, Research Fellow, examined the year ahead in the Middle East. Dr Malcolm Cook, Program Director Asia & the Pacific, predicted what will surprise us in East Asia and the South Pacific.
Their presentations can be heard here:
The year ahead - 2007 - MP3 (20MB)
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Thailand shows wisdom in restraining the herd
In this opinion piece, Lowy Institute Visiting Fellow Stephen Grenville argues that it is time to revise and apply an important lesson from the 1997 Asian crisis.
Australian Financial Review, 12 February 2007, p. 22
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Wednesday Lunch at Lowy - Professor Warwick McKibbin presentation
On 13 December at the Wednesday Lunch at Lowy, Professor Warwick McKibbin argued the case for Australia’s taking early action on climate policy.
One of the world's leading authorities on climate change policy, Professor McKibbin described why sensible climate policy is about risk management and why policies that deal with climate change need to be implemented sooner rather than later.
His presentation is available here in PowerPoint:
Early action on climate change - PPT (300KB)
The presentation can be heard here:
Early action on climate change - MP3 (19MB)
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Wednesday Lunch at Lowy - Dr John Edwards presentation
After fifteen years of uninterrupted growth, Australia's quiet economic boom shows no signs of ending. On 15 November at the Wednesday Lunch at Lowy, Dr John Edwards launched a new Lowy Institute Paper entitled "Quiet boom: how the long economic upswing is changing Australia and its place in the world", In his Paper Dr Edwards describes where the long upswing came from, what its characteristics are, how enduring it may prove to be, what it means for Australians and Australia’s place in the world economy, and where it is now headed.
Dr Edwards' presentation can be heard here:
Quiet boom - MP3 (19MB)
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Summit should put economics back into oil
In this opinion piece in The Sydney Morning Herald, Anthony Bubalo and Mark Thirlwell, drawing on their latest Policy Brief, argue that this weekend's G-20 meeting is an opportunity to reduce political conflict over resources.
Sydney Morning Herald, 16 November 2006, p. 13
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New rules for a new 'Great Game'
Energy insecurity, driven by high demand and uncertainty over supply, is fuelling a surging interest in equity in Middle East oil fields among major energy consumers, particularly in Northeast Asia. There is a risk that the resultant competition for oil and other energy resources in the Middle East will aggravate existing tensions or even create new conflicts. In a new Policy Brief, Anthony Bubalo and Mark Thirlwell argue that the G-20, meeting in Melbourne this weekend, should take a leading role in ensuring that energy insecurity does not become a global strategic problem.
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After Doha: II. Is globalisation history?
In this Lowy Institute Analysis Mark Thirlwell asks whether the collapse of the Doha Round of trade negotiations marks the beginning of the end for globalisation. Several observers have warned of the dangers of a resurgent protectionism, drawing in particular on the historical example provided by the collapse of an earlier globalisation episode. A review of globalisation, nineteenth century style, suggests that such concerns are overdone. Nevertheless, the historical record confirms that globalisation does create significant adjustment pressures, highlighting the importance of a fully functioning multilateral trading system. This paper is a companion piece to After Doha: I. The search for Plan B.
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Macroeconomic policy challenges for New Zealand: monetary policy
New Zealand is a small open economy in a globalised world. The close linkages with international financial markets present challenges for domestic stabilisation policy, which are explored in this paper in the Lowy Institute Perspectives series. There may be lessons, too, for Australia as financial markets become increasingly integrated internationally. These issues raise, once again, the desirability of even closer economic linkages across the Tasman.
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The future of the G-20
On 9 October the Lowy Institute and the Monash Faculty of Business and Economics held a seminar in Melbourne on the upcoming G-20 Summit of Finance Ministers and Central Bank Governors. This year's G-20 meeting will be held in Melbourne on 18-19 November, and will be one of the most important international economics meetings ever to be hosted by Australia. The seminar featured a presentation (available below) by Dr Martin Parkinson from the Commonwealth Treasury, followed by a panel discussion with Mark Thirlwell, the director of the Institute's international economy program, and Alan Wood, Economics Editor of The Australian. The panel was moderated by Dr Nicholas Bisley, director of the graduate programme in diplomacy and trade at Monash University.
The Institute's May policy brief on the G-20 by Mark Thirlwell and Dr Malcolm Cook, director of the Asia-Pacific program, entitled Geeing up the G-20, is at: http://www.lowyinstitute.org/Publication.asp?pid=377
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After Doha: I. The search for Plan B
In a Lowy Institute Analysis, Mark Thirlwell argues that while the suspension of negotiations in late July may or may not mark the end of the Doha Round, it will almost certainly mark a watershed for the international trading system. With Doha in the deep freeze and the future of the multilateral system in question, the search is now on for a Plan B for international trade. The most likely Plan B on offer is a deepening of the world economy's recent infatuation with preferential trade agreements. In the long term, however, the best alternative would look to reform of the multilateral system.
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Regional and global responses to the Asian crisis
In this Lowy Institute Perspective, Dr Stephen Grenville asks how economic policymaking changed as a result of the Asian crisis of 1997-8, in the countries affected, in the region, and at the global level. It is perhaps surprising how little change has occurred in the broad approach to economic policy, but there is a much greater awareness of the vulnerabilities posed by large international capital flows. The broad tenets of the Washington Consensus, with its market-based policies, remain in place, but there is a recognition that well-functioning markets require complex institutions, rules and procedures, and that these take time and effort to develop. Most of this institutional development will have to take place at the national level, but regional arrangements can offer support, and multilateral agencies (such as the International Monetary Fund) have learned from the crisis.
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Roaring tiger or lumbering elephant?
After years of economic underperformance, the Indian economic model has been transformed, and with it, India's growth performance. So much so that the last two years have brought both a widespread rethink on India’s prospects and a wave of foreign portfolio investment. This new-found optimism received something of a setback earlier this year, when there were sharp falls in Indian stocks markets. In a new paper that updates the analysis in his Lowy Paper 'India: the next economic giant', Mark Thirlwell takes another look at India's development model, evaluating both its strengths and its weaknesses and highlighting the idiosyncratic nature of India’s development path.
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Carbon price is best way forward
In this opinion piece in the Australian Financial Review, Warwick McKibbin argues that a property right over carbon must be at the core of a multi-layered response to climate change.
Australian Financial Review, 6 November 2006, p. 63
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Huge challenges and opportunities too crucial to miss
In this opinion piece in The Age, Lowy Institute Visiting Fellow Stephen Grenville, writing on the G20 meeting in Melbourne, argues that a decision must be made on what the group will actually do.
The Age, 1 November 2006, p. 19
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Domestic investment and external imbalances in East Asia
Since the 1997-98 Asian crisis, the investment decline in East Asia, outside of China, combined with the falling in public and private savings in the United States, has contributed to the surge in global current account imbalances. Using a global simulation model, this paper explores the nature of policies and shocks that might reduce these imbalances: policies to raise domestic investment in East Asia; structural reforms in the corporate and financial sectors that lower financial risk and improve investment efficiency in East Asia; a significant fiscal consolidation in the United States; and a substantial decline in the housing market in the United States.
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Environmental consequences of rising energy use in China
The emergence of China as an economic power has important implications for energy use and environmental outcomes at the local, regional and global levels. China is currently the world's third largest energy producer and the second largest energy consumer. Although China has for several decades started to address environmental problems, the focus on energy as a source of economic growth has dominated the energy debate in China. This is beginning to change as income levels in China make the environment a more important issue and as environmental quality continues to deteriorate.
This paper gives an overview of the environmental consequences of energy use in China with a focus on what responses might alleviate current and future problems.
Working Paper in International Economics, No. 8.05, by Professor Warwick McKibbin.
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FTAs not the answer - AFR opinion piece by Stephen Grenville
In this opinion piece in the Australian Financial Review, Stephen Grenville looks at what should follow the suspension of the Doha round.
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Wednesday Lunch at Lowy - Dr Andrew Charlton
At the Wednesday Lunch at Lowy on 13 September, Dr Andrew Charlton talked about a radical new plan to break the deadlock in the Doha Round and create a trading system that does more for global poverty reduction.
The plan is the centrepiece of his book, Fair Trade for All, which he co-authored with Nobel Laureate and former Chief Economist of the World Bank, Joseph Stiglitz. The Stiglitz/Charlton plan has gathered support at the World Trade Organization and the United Nations, and is now being adopted as policy in the United Kingdom.
Andrew Charlton is an economist at the London School of Economics. He has worked for the United Nations in New York and the Organisation for Economic Cooperation and Development (OECD) in Paris. He is also an Honorary Fellow of St Paul's College at Sydney University, and a director of the economic consultancy, OIR. He has a doctorate from Oxford University where he studied as a Rhodes scholar.
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Closer ties mean sharing our icons
In this opinion piece in the Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville argues the case for a common Australian-New Zealand currency.
Australian Financial Review, 11 September 2006, p. 20
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India looks West; the GCC looks East
Mark Thirlwell and Anthony Bubalo write in this article on India's growing energy ties and trade links with the Arabian Gulf countries.
The article can be downloaded from the Gulf Research Center website at: http://www.grc.ae/data/contents/uploads/india-2_6503.pdf
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Doha closes, another opens - op-ed by Mark Thirlwell
What do the latest stalemate in world trade negotiations and a dead parrot have in common? In this opinion piece Mark Thirlwell writes that the increasingly desperate attempts to claim that there remains at least some life in the Doha Round are becoming eerily reminiscent of a Monty Python sketch. Unfortunately, the current crisis in world trade is no laughing matter. If Doha is indeed dead, this would mark a critical moment in the history of the international trading system. Even if it survives, the era of huge, set-piece multilateral trade negotiations looks to be over. Figuring out what comes next is an urgent task for policymakers.
The Australian, 27 July 2006, p. 10
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A credible foundation for long term international cooperation on climate change
In this new Working Paper in International Economics, the Lowy Institute's Professor Warwick McKibbin and Peter Wilcoxen write that to succeed in reducing carbon dioxide emissions, a climate policy must establish credible long term incentives for investments in new energy sector capital and in research and development.
The authors argue that credibility implies that international agreements should focus on enhancing coordination and collaboration between countries, rather than on coercion. At the national level, credibility requires political and economic incentives that can be provided by long term tradable emissions permits, but it needs more flexibility than can be provided by a conventional permit system. They argue that the best mechanism for providing credible long term incentives is a hybrid system of long and short term emissions permits.
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NZ tests a capital idea
In this opinion piece, Stephen Grenville looks at one of globalisation's unresolved policy challenges.
Australian Financial Review, 3 July 2006, p. 24
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Global macroeconomic consequences of pandemic influenza
In a major new Analysis, Professor Warwick McKibbin and Dr Alexandra Sidorenko explore the implications of a pandemic influenza outbreak on the global economy.
Their paper examines a range of scenarios (mild, moderate, severe and ultra) that span the historical experience of influenza pandemics of the twentieth century.
Their analysis finds that a pandemic would be expected to lead to: a fall in the labour force; an increase in the cost of doing business; a shift in consumer preferences; and a re-evaluation of country risk.
The paper finds that even a mild pandemic has significant consequences for global output, costing the world 1.4 million lives and approximately US$330 billion in lost output.
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IMF needs the Group of 20
In this opinion piece, Stephen Grenville examines the role of the International Monetary Fund and the need for its reform.
Australian Financial Review, 26 June 2006, p. 24
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The high price of feeding the hungry dragon
In a Comment piece for the Financial Times, Mark Thirlwell looks at how China's appetite for resources is reshaping bilateral ties with a range of commodity exporters. Using Australia as an example, he argues that while feeding the hungry dragon is proving to be an economically rewarding experience, it also adds a new diplomatic and strategic element to the macroeconomic issues more typically associated with managing a resource boom. Commodity exporters should not make the mistake of thinking that their relationship with China will be confined to taking Beijing's money and shipping product. China has great power aspirations and superpowers, even prospective ones, tend to view their relationships with suppliers in a much broader perspective than in purely commercial terms.
Financial Times, 27 April 2006, p. 13
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A case for reform
The international economic architecture is overdue for renovation. Product of a simpler, post-war world, it faces the challenge of adapting to a new century characterised by emerging middle-class economies, new regional alliances, and crumbling ruins in once great superpowers.
Stephen Grenville, a Visiting Fellow at the Lowy Institute, and Greg Maughan, a former Commonwealth Treasury official, write that reform of the International Monetary Fund needs to focus on the technical functions the Fund should perform. They argue that the interests of medium-sized countries like Australia would be better served by devolution of some of these functions to the G20, and by more emphasis on regional solutions where global answers are not necessary. Australia should seek to promote a more radical reform agenda for the IMF, initially through the forthcoming G20 meeting that will be hosted in Melbourne later this year.
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Angst without frontiers
Mark Thirlwell explains how the proponents of globalisation are now baulking at the competition from China and India that their philosophy has inspired.
A version of this article appeared in the Australian Financial Review, 10 April 2006, p. 21
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Noodle soup
In an article in the current edition of The Diplomat, Mark Thirlwell reviews some of the causes and possible consequences of the spread of preferential trade deals to East Asia.
The Diplomat, Vol. 5 no. 1, April/May 2006, pp. 37-38
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Sensible climate policy
After almost 13 years of negotiations the Kyoto Protocol will finally enter into force on February 16, 2005. In a new Lowy Institute Issues Brief, Professorial Fellow Warwick McKibbin, one of the world's leading authorities on climate change policy, argues that Kyoto is likely to achieve very little in the quest to address the problem of climate change. Even worse, the Kyoto Protocol is so badly constructed that it has set back the quest for sensible and effective policy responses to climate change by at least a decade. The basic tenets on which the agreement is built are flawed, leaving it worryingly vulnerable to failure. In this Issues Brief Professor McKibbin outlines the requirements for a sustainable and realistic global response to climate change, describes the progress made so far in developing policy, outlines the flaws in the current Kyoto approach, and presents a more effective alternative.
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India: the next economic giant
This Lowy Institute Paper by Mark Thirlwell assesses the emergence of India as a major new player in today's global economy.
It provides an overview of India's sustained progress with economic reform to date, examines the degree of the economy's re-engagement with the rest of the world, and describes some of the challenges that still lie ahead.
The Paper also analyses the implications of the rise of this new economic giant for the international economy and for Australia.
India: the Next Economic Giant was officially launched by the Minister for Trade, the Hon. Mark Vaile, MP, in Sydney on Friday 13 August.
To order a hard copy of this publication click here.
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