This paper was prepared by Bijan B. Aghevli, Division Chief in the international Monetary Fund's Asian Department, and Jorge Marquez-Ruarte, Senior Economist in the Asian Department. In preparing the paper, the authors have relied extensively on the analysis and information provided by the...

KEY ISSUES Context. The Republic of the Marshall Islands (RMI) is going through a period of output fluctuations. The economy expanded in FY2012 by 3.2 percent, supported by export growth, but in FY2013 is estimated to have slowed to 0.8 percent due to the postponement of infrastructure projects....

In this paper, we analyze how lack of credibility and transparency of monetary and fiscal policies undermines the effectiveness of macroeconomic policies to isolate the economy from commodity price fluctuations. We develop a general equilibrium model for a commodity-exporting economy where macro...

KEY ISSUES Context: The tightening of global liquidity has increased external pressures and heightened the focus on India’s macroeconomic imbalances (high inflation, large current account and fiscal deficits) and structural weaknesses (particularly supply bottlenecks in infrastructure, power...

This paper documents the recent slowdown in investment in India and explores its underlying causes. The sharp investment deceleration has sparked an intense debate about the role of interest rates, as well as business confidence and economic policy uncertainty. Our results suggest that while...

KEY ISSUES Overview. Korea has experienced impressive growth since the 1970s, enabling it to escape the middle-income trap. However, this prosperity has been concentrated lately within the highly competitive export-oriented conglomerates, whereas household income growth and service sector...

Global activity has broadly strengthened and is expected to improve further in 2014–15, according to the April 2014 WEO, with much of the impetus for growth coming from advanced economies. Although downside risks have diminished overall, lower-than-expected inflation poses risks for advanced...