debt and chooses to default when it is optimal to do so. The possibility of default induces an endogenous sovereign risk … premium on foreign debt and an endogenous rationing limit set by foreign creditors. The model is parameterized and solved … on its foreign debt and the ability to account for the Sudden Stop of capital inflows. …

This paper provides an overview of central banking arrangements in those European countries that have adopted the euro … framework,” operating procedures, and actual performance since the euro’s launch in 1999. The analysis concludes that, given the … current macroeconomic policy regime, trends, and practices, the euro is on track for failure. …

have had even worse results for Germany. Fragility and divergence undermine the euro’s long-term survival. …

Challenging the conventional wisdom that structural problems are to blame for the euro area’s protracted domestic … and inflation persistence that owes to the ECB’s failure to internalize the euro area’s fiscal regime. This raises the …