Author: Bruce E Aronson, Creighton University

The ‘lost decade’ of the 1990s in Japan has now become two decades, with the latter marked by persistent deflationary pressure.

Beginning in the 1990s, the Japanese introduced short-term fiscal and monetary policies to stimulate the economy and ‘structural reform’ to achieve sustained economic recovery through a new post-industrial economic model. Read more…

Author: Max Corden, University of Melbourne

People critical of global imbalances often blame the surplus countries and their currency manipulation. This column introduces a Policy Insight that argues that the basic problem has been the inefficiency of the world’s financial sector, which led to unfruitful investment in the US rather than productive investment in emerging economies.

The global imbalances are widely seen as a problem, especially by the US government and US economists. Read more…

Author: Peter Drysdale

The Chinese economy continued to grow fast through the global financial crisis, spurred by a huge fiscal stimulus that pushed domestic spending out. The impact of the crisis on China was remarkably short-lived, especially given that it hit at a time when a domestic-slow down was only beginning to kick in.

The imperative of avoiding prolonged unemployment and the consequent risks of social instability saw Chinese authorities turn the economy around on a dime. China, and other emerging economies, have been a welcome bull element in the global economy. Read more…

Author: M. Govinda Rao, NIPFP, New Delhi

India’s economic growth accelerated significantly in the latter half of 2010. The growth of real GDP during the final two quarters of 2010 averaged 8.9 per cent as compared to the 7.5 per cent recorded during the corresponding period in 2009.

The acceleration of growth has been broad based and is seen in all the three sectors – agriculture, industry and services. Read more…

Author: Andrew Low, RedBridge Grant Samuel

It has now become conventional wisdom in Australia to observe that the growth of China and, to a lesser extent, other countries in Asia rescued our economy from a likely recession after the global financial crisis. While a sound banking system and proactive fiscal and monetary response were also important, Australia was fortunate to be the most proximate and efficient quarry for commodity-hungry capital investment in the region.

There is, however, a danger that Australia’s good fortune in having good customers and terms of trade might lead it to overlook the other fundamental changes going on in the region. Read more…

Author: Peter Drysdale, ANU

In 2010, East Asia Forum’s most widely read essay was Yiping Huang’s Five Predictions for the Chinese Economy in 2010. For some, China’s ability to achieve strong growth amid global recession was the biggest surprise of 2009.

For him, it was not. The Chinese government’s abilities in mobilising resources strengthened, not weakened, significantly over the past decade, he argued. If the government really believed that 8 per cent growth was critical for social stability, then they had the ability to deliver.

We begin the weekly essay series for 2011 with another of Huang’s thoughtful pieces on the risks to China’s economic growth in 2011. Read more…

Author: Peter Drysdale, ANU

With the Irish economy the latest focus of risk in industrial country recovery from the global financial crisis, Asian growth continues to be a strong and dynamic element in the international economy, despite concerns about how the Chinese authorities position to rein in their galloping economy. That was the good news as leaders strove to define the way toward strong and sustainable growth through recovery from the crisis at the G20 Summit in Seoul last week. The bad news was that, in the lead-up to the Summit, the politics of high unemployment and economic stagnation in the United States and Europe saw a stiffening of the rhetoric on fixing the current account imbalances that continue to be a feature of macro-economic relations between Asia and America.

In the lead essay this week, Wendy Dobson, provides a clear-headed assessment of how these tensions and other elements in the global economic policy agenda were managed in Seoul and how the G20 is travelling. Read more…

Authors: Mahendra Siregar and Tuti Irman, Republic of Indonesia

The unprecedented level of policy coordination by G20 countries in response to the global financial and economic crisis in 2008 was instrumental in preventing the worst economic downturn since the 1930s. It is still too early to say that the crisis is over, but at least we can safely say that it could have been much worse if the G20 had not acted swiftly. This success was the most important reason why the Summit of Heads of State or Government in Pittsburgh decided that from then on the G20 would be the premier forum for international economic cooperation—an historic decision from the perspective of global governance as well as the role of Asia in the global economy.

Does the G20 offer a new approach to global governance? Read more…

Author: Takatoshi Ito, Graduate School of Economics, University of Tokyo

The G20 includes more Asian countries than any other global grouping, and it is expected to be a good forum for Asian countries to press their agenda.

The G20 Summit was created out of the chaos of the global financial crisis. After Lehman Brothers  collapsed in September 2008, global financial markets went into a tailspin. Securities markets were frozen as buyers disappeared. Read more…

Author: Il Sakong, Chairman of the Presidential Committee for the G20 Summit

The global community quickly responded to the worst global financial and economic crisis since the Great Depression through unprecedentedly strong, concerted policy actions primarily led by the G20. Thanks to these efforts, the global economy was able to avert another Great Depression, although it could not avoid a Great Recession.

Since their first gathering in Washington DC in November 2008, the G20 leaders have met four times – Washington DC, London, Pittsburgh and Toronto – to combat the current global crisis. In the process, the G20 has proved its effectiveness by delivering outcomes which are deliverable and producing concrete implementable measures. Read more…

Author: Jeffrey Frankel, Harvard

Korea has an opportunity to exercise historic leadership when it chairs the G20 meeting in Seoul. This will be the first time that a non-G7 country has hosted the G20 since the larger, more inclusive, group supplanted the smaller rich-country group in April 2009 as the premier steering committee for the world economy. With large emerging market and developing countries playing such expanded roles in the world economy, the G7 had lost legitimacy. It was high time to make the membership more representative. But there is also a danger that the G20 will now prove too unwieldy, in which case effective decision-making might then revert to the smaller group.

When countries like China and India used to demand a larger voice in world governance based on their large populations, they did not get very far. Read more…

Author: Gary Hawke, New Zealand Institute of Economic Research

The G20 has been widely welcomed, but so far it has had little impact. If it should become effective, its legitimacy will become contested. Members of the G20 are more or less the 20 largest economies in the world. The criterion is arbitrary but not unreasonable. G20 membership is much more inclusive than that of the older G7 and G8. it is less dominated by north America and Europe than its predecessors. The inclusion of China, India and Brazil greatly enhances the legitimacy of its claim that it speaks for the major economies of the world.

The G20, however, has no basis in agreed treaties. It is not part of the United Nations system and it has no distinct legal basis. Read more…

Author: Yiping Huang, Peking University and ANU

Weaker data on consumption, income, employment, as well as forward-looking indicators in the US and the deceleration of GDP and production in China have triggered renewed fears about a double dip recession. In fact, the recent slowing of economic activity is the natural result of changes in policy and the economic environment. The slowing of economic activity is likely to be temporary. But beyond the very near term the world economy, especially the US and China, will transition to a new state of slower growth and higher inflation.

Three factors contributed to the recent slowing of economic activity. Read more…

Authors: Sherry Tao Kong, Xin Meng and Dandan Zhang, Australia National University

The global financial crisis (GFC) reduced export orders sharply and led to a decline in China’s economic growth.  As China’s exporting industries are labour intensive and most likely to employ rural migrants, it was widely believed that the GFC has had significant negative impacts on the employment and/or wages of rural migrants.

Reflecting this, at the height of the crisis, laid-off Chinese migrant workers protested outside closed factories and millions lamented lost jobs and embarked on journeys home. Read more…

Author: Jenny Corbett, ANU, and Christopher Findlay, University of Adelaide

Managing the global recovery and the transmission of shocks that might accompany economic integration continues to be a talking point around the region. An example is the recent conference in Korea organised by the IMF.

These meetings generally conclude with statements that everything matters and statements such as ‘actions in multi-country frameworks can be used to complement strengthening measures adopted at the individual economy level’. Read more…