Tuesday 16 Aug 2022 | 04:13 | SYDNEY
People | experts Stephen Grenville
Nonresident Fellow
Lowy Institute
Areas of ExpertiseRegional economic integration; Australia's economic relations with East Asia; international financial flows and the global financial architecture; financial sector development in East Asia

QE2 to end with a yawn, they hope

In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville writes that quantitative easing has been a success.Australian Financial Review, 30 May 2011, p. 23

The new carbon tax ad gets it right

I beg to differ with Sam on the carbon tax ad. Accepting that any ad will simplify this complex story, this one gets at the essence of the issues. First, the tax should be imposed as close as possible to the source of the problem. This gives maximum bang-per-buck. It\'s not unreasonable to say

How to break up the IMF old boys club

Don\'t get me wrong: I\'m not arguing that a European should be the next head of the IMF. Just that realpolitik makes that outcome inevitable. Regardless of fairness, logic, the re-balanced world economy, natural justice, the moral case, past promises, or the competence of the candidates, the

IMF faces existential threat to Euro

Provided that the European Council can agree on a credible candidate, a European seems certain to replace former IMF Managing Director Dominique Strauss-Kahn. Talk of the job going to an emerging country national is just wishful thinking. For the Europeans, the stakes are simply too high: there is

Food for thought: China inflation

China\'s inflation reached 5.3% in the year to April, down a little from the peak recorded in March, but still well above the authorities\' objective of 4%. Market commentary tends to treat this in the same way as inflation in Western countries, asking when Beijing will tighten monetary policy. But

The EU slow-motion avalanche

Portugal has now joined Greece and Ireland in seeking assistance from the European Union, the European Central Bank and the International Monetary Fund. At €78 billion (around US$116 billion), the package compares with €110 billion for Greece and €67.5 billion for Ireland, and is a

Separation part of the fix for troubled banks

In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville writes that taxpayers should not have to rescue bank operations that have little social value.Australian Financial Review, 2 May 2011, p. 23

US 'beggar-thy-neighbour' policies?

With stubbornly high unemployment and limp growth in the US, there is not much disagreement that a very accommodative monetary policy is sensible and necessary. But the combination of near-zero interest rates and large \'quantitative easing\' (in Fed-speak, \'QE2\') is ruffling feathers in emerging

Credit rating agencies: A dismal story

Standard and Poor\'s (S&P) has just put the US on notice that there is a one-chance-in- three that they will lose their AAA rating. In earlier blogs, I have wondered why anyone takes any notice of credit rating agencies, given their pitiful (and very damaging) performance in assessing risk

The IMF and Capital Controls

A year ago the IMF recognised that it had been wrong in its doctrinal advocacy of free international capital flows and acknowledged the legitimacy of capital controls, although in very restricted circumstances. After mulling this for a year, the Fund has now produced two documents which set out

SGX-ASX: A no brainer

The SGX take-over of ASX has been rejected on 'national interest' grounds. It was, as the Treasurer said, a 'no brainer'. The great puzzle is that the ASX Board ever thought that it would get a tick. It would have required special legislation to change the normal 15 per cent limit on a

Noise results from five carbon tax positions

In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville restates some simple basics of the carbon debate as a reminder of the implications of the various positions taken on the subject.Australian Financial Review, 28 March 2011, p. 23

Finance: Experts still don\'t get it

In a praise-worthy effort to learn something from the Global Financial Crisis, the International Monetary Fund (IMF) has just held a conference, 'Macro and Growth Policies in the Wake of the Crisis', which brought together top policy-makers and academics. The IMF's Economic Counselor presented

C02 emissions: Easy and hard problems

Sam has written again on the conundrum that, if energy use becomes more efficient, we might use more of it. This seems an easy one to address, at least compared with the broad problem of carbon pollution. As for the Jevons Paradox, the answer is to tax the energy which has now become cheaper

Mining windfalls belong in a wealth fund

In an opinion piece in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville argues that the mining tax should be revised to provide for a sovereign wealth fund.Australian Financial Review, 4 March 2011, p. 63

IMF diagnosis simple; prescription, less so

In an Econonic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville examines how the International Monetary Fund could get better at predicting crises.Australian Financial Review, 28 February 2011, p. 23

Central banks damned if they do, and...

The sharp rise in world commodity prices has put some central banks overseas in a bind. These higher prices will inevitably feed into headline inflation. For central banks with an inflation target, or even for those which for decades have emphasised that their over-riding target is price stability,

Reader riposte: Japan\ deficits

Kien Choong asks: Could you clarify the 'cold turkey' approach' I thought the problem (as Richard Koo describes it) is that liabilities far exceed debt (ed. note: we assume 'debt' should actually be 'assets'), causing debtors to save. Wouldn't making companies bankrupt cause asset values to

The perverse logic of rating agencies

I've already remarked on the Teflon-coated reputations of the credit rating agencies, agencies which played such a key supporting role in producing the Global Financial Crisis but which have bounced back, more self-assured than ever. Moody's has now put Australian banks on notice that it

Japan: Example or cautionary tale?

Having dealt with Japan's unique deficit problem in a previous post, what about the other countries (lots of them) who have clocked up large government debt, in many cases as a direct and indirect effect of the GFC' The most interesting test case is the UK, which is adopting the opposite

Deficits: The special case of Japan

Sam is right in finding Richard Koo's arguments on government deficits compelling. As usual, however, there are two sides to every argument. For Japan, it's only just over a month ago that The Interpreter linked us to a warning that, with government debt issue equal to tax

Want to fix the IMF? Ask an engineer

Mark Thirlwell has already noted the surprisingly forthright report of the Independent Evaluation Office on the International Monetary Fund's performance in the lead-up to the Global Financial Crisis. The IEO has given the IMF a 'fail' mark, with some justification. The Fund missed the

Resources policy leaves nation vulnerable

In an Economic Briefing in the Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville writes that other sectors are paying the price of the mining boom.Australian Financial Review, 31 January 2011, p. 21

Credit rating agencies: Rear-mirror view

One of the great survivors of the Global Financial Crisis is the credit rating agency. Despite their key role in the crisis — giving AAA ratings to what turned out to be portfolios of junk loans — the agencies emerged from the GFC with their reputation miraculously

IMF rejoins capital flows debate

Having belatedly realised that its advocacy of open slather for foreign capital flows was misguided, the International Monetary Fund is now trying to establish that it was an innocent bystander in this decades-long debate. In a November 2010 strategy document, the Fund opines that: 'In

Indonesia: Democracy is not enough

Foreign commentators have unanimously admired the progress of democracy in Indonesia in the post-Soeharto era. Judged from the efficiency and fairness of the voting process, the achievement is indeed a triumph. The harder judgment (but more relevant for a true appraisal of how democracy is

Taking stock of the ASX-SGX deal

The public debate on the proposed take-over of the Australian Stock Exchange (ASX) by the Singapore Exchange (SGX) seems to be dying down. But there are some important issues not yet covered. Here are just a few: Capitalisation of ASX-listed companies is over twice as large as SGX’s

World Bank ramblings: President should stick to his knitting

World Bank President Robert Zoellick certainly ranges widely. He will attend the International Forum for Tiger Conservation in St Petersburg this week. Last week he was pontificating on the need for international currency reform, setting various hares running by suggesting that a reformed

Fed QE2 lacks power to break up global ice

In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville writes that quantitative easing won't trigger inflation but nor will it do much good.Australian Financial Review, 15 November 2010, p. 23

A road map for global 'currency peace'

In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stpehen Grenville writes that there is a middle path away from export dependence.Australian Financial Review, 11 October 2010, p. 23

Swap exchange rate pressure for policy

In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville writes that Asia must curb excessive capital inflows.Australian Financial Review, 13 September 2010, p. 25

No helicopter drops of cash from the Fed

In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville writes that quantitative easing in the United States might have reached its useful limit.Australian Financial Review, 16 August 2010, p. 23

IMF needs to be more than just Santa Claus

In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville writes that Europe's insolvent states must be handled strictly.Australian Financial Review, 19 July 2010, p. 27

A new mind-set for exchange rates

Lowy Institute Visiting Fellow Stephen Grenville has published an article entitled 'A new mind-set for exchange rates' in the first issue for 2010 of Agenda: A Journal of Policy Analysis and Reform (Volume 17 - Issue 1).The article is available at: http://epress.anu.edu.au/agenda/017/pdf/mindset.pdf

IMF must distinguish insolvent from illiquid

In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville writes that sovereign debt presents specific problems, as the Greek experience show. Australian Financial Review, 7 June 2010, p. 23

Tinkering is pointless, we need radical reform

In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville explains that there are good reasons for not putting the entire reform burden on capital. Australian Financial Review, 10 May 2010, p. 23

Indonesian Finance Minister throws in the towel

Sri Mulyani, Indonesia’s reformist Finance Minister, will take up a very senior position at the World Bank in June. The Bank’s President, Robert Zoellick, said that she 'brings a unique set of skills and experience to the World Bank Group'. She does indeed, but Indonesia's loss may be far

Jakarta reporting

Having criticised journalists' efforts on Indonesia, I should record that Tom Allard has produced some gems recently for the SMH, most of which fit Geraldine Doogue's suggestion of writing about things that the two countries have in common — Jakarta has its revheads too. I take this as

The evolving post-crisis world

In a new paper written as background for the current Asian Development Bank Economic Outlook, Dr Stephen Grenville notes that Asia has come through the Global Financial Crisis well, with Chinese and Indian growth hardly slowing, and quick recoveries in those countries which were adversely affected.&

An Asian regional caucus for G20

In an article in Tempo Magazine (Jakarta), Lowy Institute Visiting Fellow Stephen Grenville and Program Director International Economy Mark Thirlwell suggest the formation of an East Asian caucus group of the G-20. Tempo Magazine (Jakarta), 24 March 2010

Avoiding the trade spiral

The powerful voice of Fred Bergsten, head of the influential Peterson Institute in Washington, has joined the chorus demanding revaluation of the RMB: by 25-40 per cent.  Appearing before Congress, Bergsten hit all the hot-issue buttons. He accused China of 'blatant protectionism' and of being a

Yuan not the only issue in global imbalances

In an Economic Briefing in The Australian Financial Review, Lowy Institute Visiting Fellow Stephen Grenville writes that structural adjustment needs constructive debate.Australian Financial Review, 22 March 2010, p. 10

Indonesia: Media should lift its game

Fergus notes the luke-warm feelings Australians have for Indonesia (reciprocated by Indonesians). One of the explanations of this attitude is the carping, condescending and critical tone of Australian journalistic commentary on Indonesia. President Susilo Bambang Yudhoyono's problems with

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

IMF slaughters another sacred cow

The Global Financial Crisis has triggered a remarkable self-examination by the International Monetary Fund of its received wisdom. A couple of weeks ago the Fund softened its in-principle advocacy of pure floating exchange rates, acknowledging that most emerging countries are more comfortable with

Inflation: The IMF heresy

It's only a few weeks since the IMF renounced its advocacy of 'corner solutions' for the exchange rate: that countries should have either a rigidly fixed rate or a clean float. Now, their Chief Economist is arguing for a far more radical change. Countries should aim for higher inflation (4 per

Unsustainable China

Just about everyone agrees that China has played a hugely positive role in keeping the world going through the GFC. In the process it has produced some extraordinary (and abnormal) economic statistics. Credit has been growing at 30 per cent while the rest of the world was deleveraging. Government

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