Following Public Finances: The Mirage of MDBs Countercyclicality
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.
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Language: | English |
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Inter-American Development Bank
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Subjects: | Development Bank, Capital Flow, Fiscal Policy, Public Expenditure, Public Finance, Public Debt, Gross Domestic Product, F34 - International Lending and Debt Problems, F53 - International Agreements and Observance • International Organizations, F44 - International Business Cycles, F21 - International Investment • Long-Term Capital Movements, F42 - International Policy Coordination and Transmission, Multilateral Development Banks;International government debt;Capital flows;Counter-cyclicality, |
Online Access: | http://dx.doi.org/10.18235/0002305 https://publications.iadb.org/en/following-public-finances%3A-the-mirage-of-mdbs-countercyclicality |
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