Why Is Global Business Investment So Weak? Some Insights from Advanced Economies.

∎ Business investment in advanced economies has been underwhelming since the 2007-09 global financial crisis, explained, in part, by slower growth in aggregate demand. A renewed period of weakness in investment spending began in 2014, likely reflecting the impact of lower commodity prices and, most recently, a rise in economic uncertainty. ∎ In coming years, there is scope for growth in investment spending to pick up as the drag from low commodity prices and elevated uncertainty fades. ∎ But even as these headwinds recede, business investment growth is likely to remain slower than in the pre-crisis period largely because of structural factors. Such factors include slowing growth rates for population and total factor productivity and an increasing share of services in the economy. [ABSTRACT FROM AUTHOR]

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