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dc.titleSovereign External Borrowing and Multilateral Lending: Dynamics and Crises
dc.contributor.authorLotti, Giulia
dc.contributor.authorAvellán, Leopoldo
dc.contributor.authorGalindo, Arturo
dc.contributor.orgunitOffice of Strategic Planning and Development Effectiveness
dc.coverageLatin America and the Caribbean
dc.date.available2018-11-30T00:00:00
dc.date.issue2018-11-30T00:00:00
dc.description.abstractFiscal policy is procyclical in developing countries. An ample literature has explained this fact and explored its consequences for aggregate cyclical fluctuations. Multilateral Development Banks (MDBs) are an important source of finance for governments and therefore play a role in the execution of fiscal policy. In this paper, we assess whether MDB disbursements to the sovereign commove with government expenditure and with private sovereign lending, during different stances of fiscal policy and during fiscal crises. We find that multilateral lending to the sovereign is correlated with government expenditure and this correlation does not change if the government is running a surplus or a deficit. However, when the sovereign is having a fiscal crisis associated with unsustainable fiscal policy, this relationship disappears for Regional Development Banks (RDBs) and the World Bank (WB). Finally, we find evidence of synchronization between MDBs and IMF during fiscal crises.
dc.format.extent35
dc.identifier.doihttp://dx.doi.org/10.18235/0001443
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Sovereign_External_Borrowing_and_Multilateral_Lending_Dynamics_and_Crises.pdf
dc.language.isoen
dc.mediumAdobe PDF
dc.publisherInter-American Development Bank
dc.subjectDevelopment Bank
dc.subjectCapital Flow
dc.subjectFiscal Policy
dc.subjectPublic Debt
dc.subject.jelcodeF41 - Open Economy Macroeconomics
dc.subject.jelcodeF34 - International Lending and Debt Problems
dc.subject.jelcodeF53 - International Agreements and Observance • International Organizations
dc.subject.jelcodeF44 - International Business Cycles
dc.subject.jelcodeF21 - International Investment • Long-Term Capital Movements
dc.subject.keywordsMultilateral Development Banks;International government debt;Capital flows
idb.identifier.pubnumberIDB-WP-00936
idb.operationBK-C2031
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