Cheng, Jin; Dai, Meixing; Dufourt, Frédéric - Bureau d'Économie Théorique et Appliquée (BETA), … - 2014
We propose a model to analyze the conditions of emergence of a twin banking and sovereign debt crisis in a monetary union with an institutional framework which is broadly similar to the Eurozone at the onset of the financial crisis. We show that when the responsibility of rescuing the banking...