After going through ‘Great Moderation’ and interrupted by ‘Global Imbalances’ that subsequently led to the ‘Great Recession’, external conditions are becoming more difficult for emerging markets. With the up-and-coming ‘Great Divergence’, the uncertainty grows further. The elevated risks for emerging Asia can be traced back to the period of massive capital inflows to the region associated with changing global liquidity since mid-2000s, following the ultra-easy money policy and the unprecedented quantitative easing (QE) in advanced economies. Three phases of capital flows are identified, and the implications of each for emerging Asia are to be discussed in the lecture.

Professor Iwan Azis is currently at ANU as the Thee Kian Wie Distinguished Visiting Professor in the Indonesia Project. He has been teaching economics at the University of Indonesia since 1977 and at Cornell University since 1992. He was the chairman of department of economics (1984-1992), and the director of Inter-University Center for Economics (1986-1992) at the University of Indonesia. During 2005-2010 he was the director of graduate study at the Regional Science Program, Cornell University. His latest publications are: Managing Elevated Risk (Springer, 2015), ‘ASEAN’s Need to Rebalance: More Regional than Global?’ in Transpacific Rebalancing (Brookings Institution Press, 2015), and How Capital Flows in the Midst of Excess Savings Affect Macrofinancial Vulnerability (Asian Development Review, 2015).