Following Public Finances: The Mirage of MDBs Countercyclicality

Leopoldo Avellan (), Arturo Galindo and Giulia Lotti

No 10262, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: This paper investigates the co-movement of sovereign lending from multilateral development banks (MDBs) and private creditors with government expenditure. The paper finds that multilateral sovereign lending follows government expenditure and that this correlation does not change if governments are running a surplus or a deficit. This finding raises doubts on the feasibility of MDBs to be counter-cyclical, unless the governments themselves implement counter-cyclical fiscal policies.

Keywords: Multilateral Development Banks; International government debt; Capital flows; Counter-cyclicality (search for similar items in EconPapers)
JEL-codes: F21 F34 F42 F44 F53 (search for similar items in EconPapers)
Date: 2020-01
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Following public finances: The mirage of MDBs countercyclicality (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:10262

DOI: 10.18235/0002305

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