©Andrew Biraj/Reuters

As G20 leaders look distraught at a global economy that is faced with weak growth, high unemployment and rising income inequality, they should repeat to themselves that this is not inevitable. The International Monetary Fund (IMF), while putting out another downward revision of growth forecasts, admitted that recovery is too slow and fragile, while recognising the problem of income inequality. The OECD, in its reports on New Approaches and Economic Challenges (NAEC) and its 2014 OECD Employment Outlook, acknowledges that rising inequality affects economic growth and social cohesion, sapping trust in markets and institutions.

G20 countries are taking action to lift growth in the world economy. Will their commitments be enough?

Heather Smith, Australian Sherpa to the G20 ©G20 Australia

Each G20 presidency faces its own challenges. A presidency must respond to global economic conditions, it must build on previous work, and it must seize opportunities to progress with reforms where members can reach consensus.

Gabriela Ramos, OECD Chief of Staff and G20 Sherpa ©OECD

The Australian G20 presidency has made a critical and decisive contribution to reinforcing the effectiveness and impact of the Group of 20 (G20). Under Australia’s chairmanship, the work of the G20 has gained in coherence and strength, which should reinforce our joint efforts to boost and sustain future growth. Our organisation is proud to have contributed significantly to these achievements.

© Andre Dobroskoy/ Under license from Shutterstock

Over the past few years we have witnessed some challenging times. When Australia took the reins of the G20 presidency nearly a year ago, the global economy was still recovering from one of the most severe recessions of modern times.

Australia's Joe Hockey listens to OECD Secretary-General Gurría © OECD Flickr

“Life is full of alternatives but no choice.” G20 leaders at the summit in Brisbane, Australia, in November should reflect on these words by Australian writer Patrick White, a Nobel Laureate, as they prepare their economic strategies for the years to come.

How much of a country can you count? The newly updated Understanding National Accounts from the OECD answers this question and gives a summary of how to calculate the accounts as well as the principles and data sources behind them.

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The OECD does not see deflation taking hold in the euro area, but the risk has risen.

Angel Gurria, Secretary-General of the OECD

International investment treaties are in the spotlight as recent articles in the Financial Times and The Economist show. An ad hoc investment arbitration tribunal recently awarded $50 billion (€40 billion) to shareholders in Yukos. EU consultations on proposed investment provisions in the Transatlantic Trade and Investment Partnership (TTIP) with the United States generated a record 150,000 comments. There is intense public interest in treaty challenges to the regulation of tobacco marketing, nuclear power and health care.

©LucyNicholson/Reuters

This working paper argues that some of the technologies associated with crypto-currencies are very interesting and may one day become a serious disruptive technology for financial intermediaries—but that these technologies should be thought about separately from the crypto-currencies like Bitcoin that have some very dubious uses.

The world’s first ATM cash machine opened in Vancouver in October 2013, offering Bitcoin conversion to and from Canadian dollars. As the global use of Bitcoin continues to increase, governments around the world have both greeted and shunned the anonymous digital crypto-currency. 

"Social perception is a prerequisite for a level playing field among all entrepreneurs."

The recovery from the Great Recession has been slow and arduous, and has at times threatened to derail altogether.

©Brendan McDermid/Reuters

Global economy faces slower future–; –top earners capture more of income; Soundbites; Economy; Country roundup; Health spending starts to rise; Financing tough for SMEs; Development's productivity gap; Plus ça change… 

Your report on Germany proposes raising capital gains taxes on residential real estate (except for owner-occupied housing) to promote equity of income distribution and government revenue (OECD Economic Surveys: Germany, May 2014, see oecd.org/germany). 

©Reuters

Some 50 years ago, Japan entered into the period of post-recovery after the Second World War, while consolidating its path for economic growth and making a comeback on the international scene. Japan’s accession to the OECD was symbolic in that respect. Another symbol was the Tokyo Olympic Games, which triggered a transformation of Japan’s international image, thanks to improvements in its physical infrastructure, transportation systems and services. A new expressway network had been built across Tokyo, the new Shinkansen high-speed “bullet” train now relayed Tokyo and Osaka in four hours, and television began broadcasting in colour.

©Brendan McDermid/Reuters

When the worst crisis in over 50 years struck OECD countries in 2008, people rightly asked why they had not been warned. After all, the information world is awash with economists, global traders and other experts watching the markets, and international organisations such as the OECD and the IMF are tasked with what is known as economic surveillance. 

Japan may be on the cusp of a fresh wave of “cool entrepreneurship” that could turn the country’s creative industries into a new source of growth. 

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While today Japan is one of the world’s largest and most advanced economies, a member of the G7 and the most developed country in Asia, in 1964 the picture was quite different.

©David Rooney

After two decades of sluggishness, a recovery could be under way. This time, it could be sustained.

Haguiwara Toru and Thorkil Kristensen, Memorandum of Understanding to join the OECD, signature of the Convention, in the OECD Observer No 6, October 1963, page 3 ©OECD

OECD membership crowned Japan’s efforts to reintegrate into the international community after the Second World War, while helping to turn the organisation into a global, rather than European, player. But the country’s accession had to be managed with great care, reflecting tensions of the time. 

Small and medium-sized enterprises refers to firms of up to 250 workers each, but did you know that these so-called SMEs make up some 90% of employment in the OECD area? 

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Optimism has proved to be another major victim of the economic crisis, according to How’s Life? Indeed, people’s long-term expectations about their subjective well-being fi ve years from now have deteriorated almost everywhere in the OECD area. And most of them don’t expect things to get much better. 

After a euphoric decade, reforms to consolidate recent gains and confront challenges ahead are needed. Are Latin America’s economic fortunes changing? Over the last decade, policymakers and the general public became used to good news from this lively continent. Latin America was abuzz with optimism, buoyed by strong growth and rising incomes.

©Rory Clarke

Imagine a house that keeps itself warm in the wintertime. Think of the savings in terms of fuel bills and unfriendly emissions. Such houses in fact exist. Called “passive houses”, the concept of these highly energy-efficient buildings took root in the 1990s, before slowly consolidating as a niche construction concept in the 2000s. Are passive houses now actively moving into the mainstream as sustainable buildings? 

Energy has always been a hot political issue, but recently the temperature has been cranked up another notch. Large, persistent differences in natural gas and electricity prices across regions, coupled with a sustained period of high oil prices–unparalleled in market history–have many governments on edge. 

©David Rooney

The global campaign will continue in 2014 to improve international tax rules, many of which were first designed over a century ago, and to make them fit for the era of globalisation and new technologies. In 2013 policy attention was focused on the problem of profit shifting by global firms and its negative effects on tax bases, with the OECD issuing its widely publicised 15-point Action Plan on Base Erosion and Profit Shifting (BEPS) to leaders at the G20 summit in September. A key action area in the plan concerns crossborder tax hybrid schemes, with an OECD report due to address the problem in 2014. How do they work? 

When G20 regulators met in Pittsburgh in September 2009–it had taken them a full year to react to the collapse of Lehman Brothers–they set out an ambitious financial reform agenda. No stone would be left unturned, no shadow in the banking system unexposed. Action would cover all financial market segments and players, and lessons would be learned from the crisis to ensure that the 2008 debacle never happened again.

©Jackie Naegelen/Reuters

The car industry has taken a dent since the recession started to bite in 2008, but even before then, new patterns were emerging that would reshape the sector for a long time to come. 

Global activity and trade are projected to strengthen gradually in 2014-15, but the recovery is likely to remain modest, the latest OECD Economic Outlook reported in November. 

Economic data

GDP growth: +0.6% Q3 2017 year-on-year
Consumer price inflation: 2.3% Sept 2017 annual
Trade: +4.3% exp, +4.3% imp, Q3 2017
Unemployment: 5.7% Sept 2017
Last update: 14 Nov 2017

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