A monetary union among autonomous countries cannot simultaneously maintain an independent monetary policy, national fiscal sovereignty and a no-bailout clause. These three features make up an impossible trinity, and attempts to preserve all three concurrently will ultimately end in failure. In...

The lesson from previous episodes of trade reform is in part a story of political framing as well as a story of compensatory deals. Countries can calculate that they might lose out on the solution to one of the issues but gain on another.