By Alex Tarrant
Former Reserve Bank of Australia board member Warwick McKibbin talks in the video above to interest.co.nz's Alex Tarrant on why he thinks Australia and New Zealand have positive economic outlooks over the medium-to-long term.
He says if the capital invested by the likes of China and India in Southern European and US housing can be unlocked and reinvested back into emerging economies - particularly in East Asia - it's a good news story for Aus/NZ.
Rising returns in those emerging economies also need to be reinvested to propel further growth for the expansion of the middle classes
However, waiting for a favourable European solution, which would require a transfer of German taxpayer wealth to shore up the Spanish and Italian economies - McKibbin thinks Greece should be out of the Euro - was like waiting for Godot.
Meanwhile, while the European crisis was the biggest challenge currently facing the world economy, McKibbin believes the biggest challenge facing the world economy in 5-10 years will be inflation in the US, once the business cycle there got going again.
This article will be updated with McKibbin's comments in the video above.