Canzoneri, Matthew B; Cumby, Robert E; Diba, Behzad T - In: Economic Journal 111 (2001) 474, pp. 667-90
A new "fiscal" theory of price determination has implications for exchange rate systems and common currency areas. We show that deeper monetary integration requires the discipline of a Ricardian regime; that is, the government must guarantee fiscal solvency for any sequence of prices or exchange...