Programs and Projects

The International Economy

G-20 leaders at the G-20 Summit in Cannes

Reuters/Kevin Lamarque

G-20 leaders at the G-20 Summit in Cannes

The International Economy program seeks to analyse and understand some of the key trends that are shaping our international economic environment and the associated consequences for our world and Australia’s place in it. As the world economy is reshaped by a series of powerful forces, including but not limited to globalisation, the Great Convergence, the demographic transition, and urbanisation, these drivers are redistributing economic power across countries and peoples, challenging global economic governance, helping rewrite the economic rules of the game, and raising critical questions about development and sustainability.

Getting to grips with the trajectory of today’s international economy requires understanding the forces that are shaping it. Two of the most important are globalisation and the Great Convergence. Understanding globalisation involves analysing the cross-border flows of goods, services, capital and people along with the evolving policies and technologies and public attitudes that either facilitate or impede them; understanding the Great Convergence involves tracking the speed, intensity and durability of catch-up growth in the world’s key emerging markets.

Both forces are having profound implications for the way our global economy works. The rapid urbanisation and industrialisation of the developing world creates challenges for environmental sustainability and resource security. Existing mechanisms of global governance like the WTO and the IMF have to deal with new pressures, even as new bodies like the G-20 grapple with old problems of crises and adjustment. Meanwhile, the rise of new economic powers implies new geo-political and geo-economic alignments.

Understanding these forces and their consequences is the core objective of the International Economy program.

 

The Eurozone's bad bets: a beginner's guide to the Eurozone crisis

In this new Working Paper, Mark Thirlwell provides a beginner’s guide to the Eurozone crisis. He argues that the Eurozone experiment has rested on a series of big economic and political bets, and that it’s now clear that almost none of them have paid off. European Monetary Union is no longer sustainable in its current incarnation. The Eurozone’s long-term future therefore depends on whether Europeans are able to deliver the institutions needed to make the currency union work.

26 July 2012 By: Mark Thirlwell
Sensible climate policy

In Sensible climate policy Professor Warwick McKibbin criticises the Kyoto Protocol that had just entered into force in February 2005. He predicts that the policy would not succeed in reducing emissions and argued that it was a mistake to continue to follow the ‘targets and timetables’ approach of the Kyoto Protocol where countries attempt to negotiate a legally binding international agreement.

14 February 2005 By: Prof. Warwick McKibbin
The return of geo-economics

The return of geo-economics makes the case that our international environment has become one that is marked by an increasingly dense entanglement of issues involving international economics, national security and foreign policy. Geo-economics was born in 1990, inspired by the idea of strategic economic competition between Japan and the United States, and as Japan’s economy faded, the term fell out of use.

14 September 2010 By: Mark Thirlwell
Our consensus future: the lay of the land in 2025

Despite repeated evidence of failure to forecast, there is a surprisingly strong consensus regarding the most likely future shape of the world economy. This paper describes this ‘consensus future’ and reviews some of the key building blocks, sketching out a possible picture of the world economy in 2025. It also highlights some of the key risks to these forecasts.

31 August 2010 By: Mark Thirlwell
From the Fall of the Wall to the Fall of the Banks and beyond: three persistent problems for the global economy

In this 2010 working paper, Mark Thirlwell looks at the changing shape of a global economy that was born with the fall of the Berlin Wall in November 1989. The early version of the global economy that resulted was marked by several defining features: the victory of the market over the state; the rapid advance of globalisation, especially in its financial form; and the pre-eminence of the Western economic model in general, and the US economic model in particular.

30 April 2010 By: Mark Thirlwell
The spectre of Malthus

In 2007-2008, the world economy was faced with a major food crisis, as the cost of food soared. In the year to July 2008, the Food and Agriculture Organization of the United Nations (FAO)’s food price index rose by more than 50%. The price of rice more than tripled in the 12 months to April 2008. In 2007, the number of food-insecure people increased by between 50 million and 130 million as the global food import bill rose to its highest level on record. Higher food prices may have pushed

30 January 2009 By: Mark Thirlwell