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Investment growth in emerging market and developing economies has slowed sharply since 2010. This paper presents a comprehensive analysis of the causes and implications of this slowdown and presents a menu of policy responses to improve investment growth. It reports four main results. First, the slowdown has been broad-based and most pronounced in the largest emerging markets and in commodity exporters. Second, it reflects a range of obstacles: weak activity, negative terms-of-trade shocks, declining foreign direct investment inflows, elevated private debt burdens, heightened political risk, and adverse spillovers from major economies. Third, by slowing capital accumulation and technological progress embedded in investment, weak post-crisis investment growth has contributed to sluggish growth of potential output in recent years. Finally, although specific policy priorities depend on country circumstances, policymakers can boost investment both directly, through public investment, and indirectly, by encouraging private investment, including foreign direct investment, and by undertaking measures to improve overall growth prospects and the business climate.

Developing Economies --- Emerging Markets --- Fiscal Policy --- Infrastructure Investment --- Investment Slowdown --- Monetary Policy --- Policy Space --- Structural Reforms

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This paper discusses Solomon Islands’ Request for an Extension of the Arrangement Under the Extended Credit Facility (ECF). All end-December 2014 performance criteria (PCs), indicative targets (ITs) for March 2015, and end-June 2015 PCs have been met by a considerable margin, with the exception of the ITs on government-funded recurrent spending on health and education, which have been consistently missed since 2014 albeit by a small margin. September 2015 available data indicate that ITs on international reserves, net domestic assets at the Central Bank, and net credit to the government have been comfortably met. The authorities remain committed to macroeconomic stability and completion of the reviews.

Macroeconomics --- Money and Monetary Policy --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Institutions and the Macroeconomy --- Monetary economics --- Credit --- Structural reforms --- Money --- Macrostructural analysis --- Solomon Islands

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This paper analyzes the relationship between fiscal adjustment and real GDP growth in a panel of 26 transition economies during 1992-2001. Unlike most previous studies using cross-country regressions, the paper finds a positive and statistically significant relationship between fiscal adjustment and growth that is robust to different model specifications and estimation methods. The paper also presents country experiences to delve deeper into the mechanisms that may underlie this statistical relationship.

Economic stabilization -- Developing countries. --- Electronic books. -- local. --- Fiscal policy -- Developing countries. --- Business & Economics --- Economic History --- Economic stabilization --- Fiscal policy --- Macroeconomics --- Public Finance --- Fiscal Policy --- Debt --- Debt Management --- Sovereign Debt --- Institutions and the Macroeconomy --- Public finance & taxation --- Fiscal consolidation --- Government debt management --- Fiscal stance --- Structural reforms --- Debts, Public --- Russian Federation

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Israel’s post-stabilization experience of moderate inflation and eventual disinflation is compared with experiences in other countries. Lessons that emerge from an examination of international experiences indicate the importance of establishing early on credibility in the nominal anchor and a commitment to persevere with disinflation policies, achieving and maintaining a tight fiscal position, measures to reduce nominal rigidities, and widespread structural reform. Israel falls short on several criteria which explains why taming inflation in the post-stabilization period has been difficult. The paper concludes with a consideration of institutional arrangements that could sustain the current low inflation levels.

Inflation --- Macroeconomics --- Money and Monetary Policy --- Public Finance --- Price Level --- Deflation --- Policy Objectives --- Policy Designs and Consistency --- Policy Coordination --- Monetary Policy --- Fiscal Policy --- Institutions and the Macroeconomy --- Monetary economics --- Inflation targeting --- Disinflation --- Fiscal policy --- Structural reforms --- Prices --- Monetary policy --- Macrostructural analysis --- Israel

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Chile’s average economic growth between 1990 and 1998 was above 7 percent per year, more than double than in previous decades, and higher than in any other Latin American country in the same period. This paper assesses empirically the main hypotheses suggested in the literature about the factors underlying this rapid growth: good economic policies, good luck in the external sector, and the country’s return to a democratic system of government. The statistical and quantitative results indicate that Chile’s rapid growth during the 1990s was due to good policies and the improved political situation.

Exports and Imports --- Inflation --- Macroeconomics --- Production and Operations Management --- Economywide Country Studies: Latin America --- Caribbean --- Macroeconomics: Production --- Institutions and the Macroeconomy --- Price Level --- Deflation --- Empirical Studies of Trade --- International economics --- Productivity --- Production growth --- Structural reforms --- Terms of trade --- Production --- Macrostructural analysis --- Prices --- International trade --- Industrial productivity --- Economic theory --- Economic policy --- nternational cooperation --- Chile --- Nternational cooperation