Both the World Bank and IMF have recently announced new forecast for world growth this year and next, trimming more than half a per cent off their forecasts made six months earlier. Seen in historical terms, the central forecast doesn\'t look too gloomy: the IMF estimates that growth

Andrew Shearer represents a long tradition in Australian diplomacy, of viewing Asia through the prism of our relationship with the US. No serious commentator is suggesting that Australia should focus on Asia to the exclusion (or even downgrading) of our US relationship; everyone agrees that keeping

Of course it\'s good to see the Foreign Minister deliver his \'wake up to Indonesia\' call to Australian businesses to seize the opportunities in Southeast Asia\'s fastest growing economy. But while the Minister is urging businesses to act, his Department\'s Travel Advisory is telling them not to

Whenever it comes to supporting ailing financial sectors, central banks routinely quote the nineteenth-century Bagehot dictum: \'lend freely to solvent institutions against good collateral\'. This might sound sensible, but in fact it is a narrowly conservative strategy. At the time, the then-

President Truman famously complained that his economists always gave advice in terms of \'on the one hand...on the other hand\', and called for a one-handed economist. This criticism doesn\'t apply to the current bunch of economic commentators, all single-minded in their views. The problem is that

It\'s been well known for decades that incomes of less-skilled workers in advanced countries have been squeezed by globalisation (they now have to compete with Chinese workers) and technology (their jobs are increasingly done by machines/computers). In the US, hourly earnings of those who did not

The European sovereign debt mess is a reminder of how foreign capital flows can get countries into trouble. It\'s not just the southern Europeans who are feeling the pinch. The heavy investment of French and German banks in Greek government bonds (and the debt of other troubled countries) has left

There seems to be a competition among Republican US presidential hopefuls to see who can pour the most abuse on the Federal Reserve, Chairman Bernanke and monetary policy. Front-runner Rick Perry said Bernanke would be \'almost treasonous\' if he continued quantitative easing (QE) policies. At

Rescuing Greece will be expensive. And if Greece is not the end of the story, the costs will be mind-numbing. Thus it is no coincidence that European Commission president Barrosso has reached into the bag of possible ways to pluck the taxation goose with minimum squawking, and has rediscovered the

Few would dispute that the politicians\' handling of the world economy has been seriously deficient. Perhaps the lack of political consensus on what to do is not too surprising: the issues often trespass on vested interests and deeply-held views. Less understandable and less forgivable, however, is

As the world economy struggles to extricate itself from the mire of the 2008 global financial crisis (with GDP in the major advanced economies still below 2007 levels), you might expect that the central player in this disaster, the financial sector, would have undergone transformative reform. You

As the advanced economies slipped into recession in 2008, many observers doubted that China (and other emerging countries such as India and Brazil) could continue to grow rapidly without the help of strong demand for their exports from the US and Europe. As it turned out, the emerging countries did

Sam demonstrates just how adamant the Republican presidential hopefuls are that taxes mustn\'t go up. I\'m no expert on taxes, let alone in US taxes, but this position looks very strange if you want to run a normal advanced country. The ratio of federal taxes to GDP has now fallen to 14%,

The US has squeaked through its debt ceiling crisis and survived its Standard and Poor\'s downgrade. While failure to increase the debt ceiling would have been \'calamitous\', both these events were distractions from the pressing economic problems facing the US. The immediate issue is that the

The evolving Greek debt tragedy illustrates the subtle nature of the financial sector\'s risk management process. On the surface, its risk analysis seems to have been a dismal failure, apparently unable to anticipate obvious problems. But in practice the financial sector seems to have largely

If the US Congress doesn\'t agree to raise the limit on US debt by 2 August, government expenditures will have to be cut to match revenue, involving a 40% cut in spending. This would not mean a default on US debt (interest payments would still be met), but financial markets would be shocked. Fed

The Annual report of the Bank for International Settlements (the central bankers\' \'club\' in Basel) is pressing the alarm button on both monetary and fiscal policy, not just for specific countries, but for the world as a whole. They have a point on fiscal policy. The Global Financial Crisis did a

The idea that Indonesia might be a model for Egypt\'s emerging democracy has been discussed before on The Interpreter. This post by Giora Eliraz brings the story up to date, but it is seriously misleading in the impression it gives of the history of democracy in Indonesia. Let me not get

US Treasury Secretary Tim Geithner provoked annoyance and pushback when he gave an update on financial sector reform since the 2007/8 Global Financial Crisis.  He made US progress sound impressive. The US has closed or restructured nine of its fifteen largest financial institutions, passed