Saturday 15 Dec 2018 | 23:02 | SYDNEY
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Global Economy

The ebbs and flows of global economic conditions, trade and capital flows, thus have substantial implications for the Australian economy, and Australia’s major regional trading partners. Understanding the broad trends, and identifying emerging challenges and opportunities within the global economy, is central to the work of the International Economy Program at the Lowy Institute.

The highly integrated nature of the modern global economy became especially evident during the 2008 global financial crisis. What began as a localised problem within the residential asset-backed securities market in the United States, eventually brought down major financial firms across the Western world, and ultimately pushed the United States and Europe into a deep and prolonged recession. Although global economic growth has recovered somewhat since 2008, it is still much lower than pre-2008 trends, and the hangover from the crisis has manifested itself in the form of high unemployment levels throughout much of the developed and developing world, as well as an increasing level of inequality both within and between countries.

Understanding the economic rise of Asia, and particularly of the growing middle class within Asia, is also crucial to the broader work of the Lowy Institute. Political economy analysis on major players in the region, chiefly China, India and Indonesia, features heavily in the work of the East Asia Program and the International Security Program.  

The TPP is not a containment strategy

Is the TPP an effort to contain China? If you've been reading the papers or glancing at social media recently, you could be forgiven for thinking so. The New York Times didn't quite use the word containment, but argued that the agreement was a 'win for the United States in its contest with China

G20 lacking ambition on climate change

G20 energy and resources ministers concluded the first-ever G20 Energy Ministerial in Istanbul over the weekend. Their communique is an initial response to the call from G20 leaders at last November's Brisbane summit to meet and progress nine agreed principles on energy collaboration. With

TPP: Not worth the risk

After marathon talks, the Trans Pacific Partnership has been sealed. The stage is now set for some fantastic battles to get this through national legislatures. I'll leave it to others to count the numbers. I've written previously about my concerns regarding the TPP, and agreements like it. I won't

DFAT & digital diplomacy: In denial and in need of review

In 2010 former Lowy Institute research fellow Fergus Hanson published a forward-looking policy brief urging Australia's Department of Foreign Affairs and Trade (DFAT) to catch up to the rest of the world, join the 21st century and get online. Social media, he argued, is only one aspect of digital

Syrian refugee crisis: Time for the G20 to step up

By the Lowy Institute's G20 Fellow Tristram Sainsbury and Research Associate Casper Wuite. Chatham House's Paola Subacchi recently asked why the G20 has not addressed the Syrian refugee crisis. She acknowledges that refugee issues have not historically been within the G20's bailiwick. However, she

Reader riposte: Australia-India nuclear deal

By Ron Walker, currently a visiting fellow at the Asia Pacific College of Diplomacy at ANU. Ron is a former DFAT officer who worked for 20 years in Australia's nuclear diplomacy. Among the positions he occupied were the first Head of the Nuclear Safeguards Branch and Chairman of the Board of

Waiting for the Fed to move

Global financial markets are on tenterhooks waiting for the US Federal Reserve to decide when to start raising the Fed funds rate – the short-term interest rate which sets the datum for many other interest rates. The media have reported this in portentous tones, exploring every possible downside

The G20 and the Future of International Economic Governance

The G20 has become a key international forum since it was set up in 1999. When Australia began its presidency of the 2014 summit in Brisbane, many commentators suggested that Australia’s chairing of the G20 would reinvigorate it. This timely book looks at what that meeting achieved and what has

Humanity's carbon countdown

First, the good news. We have enough fossil fuel to survive until the century's end. Today's proven reserves of coal, oil and gas combined is about 83 years (at current usage rates), so Spaceship Earth could make 2100 – the exact date that IPCC scientists have set for mankind's plan to moderate

To effectively counter ISIS online, we need a narrative

Back in April, Fergus Hanson highlighted the glaring need for a global response to ISIS in the cyber domain, and welcomed the announcement of an $18 million initiative to counter extremist propaganda online from the Australian Government. Last month Defence Minister Kevin Andrews announced the

Papua New Guinea: Keep calm and muddle through?

By Jenny Hayward-Jones, Director of the Lowy Institute's Melanesia Program, and Jonathan Pryke, Research Fellow. Papua New Guinea has been in the international spotlight a lot in the last month and it has been almost all bad news. Revelations of a record budget deficit, the emerging worrying impact

Economic crisis in China? We're not there yet

I started my job at the Federal Reserve three weeks before Lehman Brothers declared bankruptcy. I wish I had kept a diary of my initial months at the Fed, so I could recall clearly what we thought was happening each day. I do remember there was a discrete point where suddenly everything felt like

Choking aviation system threatens China's ambitions

Last month Hong Kong's Cathay Pacific airline began to cancel some routes to mainland destinations – a surprising decision given the huge potential in China, where air journeys have doubled since 2008. But Cathay's reason is not demand. It's because flights in China have become so unreliable that

Why we still need UN climate negotiations

The Marrakesh Accords, the Bali Roadmap, the Cancun Agreements, the Durban Outcomes, the Doha Climate Gateway, the Lima Call for Climate Action – the grand names given to decisions taken under the UN's Framework Convention on Climate Change (UNFCCC) stand in contrast to the meagre progress made on

Lebanon's garbage crisis reveals political paralysis

It's 2014 and it's a beautiful summer evening in Lebanon. As the heat of the day subsides, and the rubicund sun slowly sinks into the shimmering azure sea, breathe deep and you can inhale a malodorous scent that gently wafts up from the pile of burning trash emanating from the Karantina waste

Indonesia: We don't have to be condemned to crisis

Ken Ward is to be congratulated for a straight forward and sober analysis of the Australia-Indonesia relationship. In his own matter of fact style, Ken takes us through a complex relationship and provides unique understanding and insight. His core point is that the Australia-Indonesia

Interview: Sadegh Zibakalam on the Iran nuclear deal

Sadegh Zibakalam is a prominent Iranian intellectual and political commentator and a Professor of Political Science at the University of Tehran. I spoke with him from Tehran: Q. Is this a good deal for Iran? How significant are the concessions made by Iran to reach this agreement?  Obviously it'

History rhymes on Greek debt

Just about everyone agrees that the Greek problem has been kicked down the road again, and probably not even very far.  The fantasy nature of the 'agreekment' is clear. Let's put to one side, for instance, a structural reform program which demands that Sunday be mandated as a work-day. This might

Russia gives way to China in BRICS and SCO

This month saw a super summit of two organisations that are significant for both Russia and China. The 7th BRICS summit and 15th Shanghai Cooperation Organisation (SCO) summit, both held in Ufa, Russia, included the typical member-state declarations confirming cooperation on major issues such as

Iran nuclear deal: Surrendering to grim reality

The conclusion of the Iran nuclear deal – or the Joint Comprehensive Plan of Action, to give it its formal title – has already guaranteed us one thing: mutually assured hyperbole. Barrages of outrage were being fired even before the deal was signed. Israeli Prime Minister Benjamin Netanyahu

China's record shows it isn't ready for global leadership

Michael Thawley's comments on China's present global leadership credentials and ambitions are correct and phrased in the refreshingly direct manner Australians usually take as a badge of national pride and uniqueness. The fact that his comments caused such a stir in Australia (and seemingly in

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