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This paper studies the implications of the circulation of interest bearing regional debt in a monetary union. Does the circulation of this debt have the same monetary implications as the printing of money by a central government? Or are the obligations of this debt simply backed by future...
Persistent link: https://www.econbiz.de/10013310257
This paper studies fiscal spillovers in a monetary union. The focus of the analysis is on the interaction between the fiscal policy of member countries (regions) and the central monetary authority. When capital markets are integrated, the fiscal policy of one country will influence equilibrium...
Persistent link: https://www.econbiz.de/10013151966
when young and have random tastes over the composition (domestic vs. foreign goods) of old age consumption. In equilibrium … multiple currencies to deal with uncertainty in their optimal consumption bundles. We argue that this equilibrium is Pareto …
Persistent link: https://www.econbiz.de/10013218515
smooth consumption and distortionary taxes across the regions. We characterize the conditions under which bailouts occur and …
Persistent link: https://www.econbiz.de/10012750657
This paper studies the role of exit from a monetary union during a debt crisis. A monetary union, such as the European Monetary Union, needs to establish a procedure for exit as a tool to cope with debt default. The paper studies various forms of exit and argues that "Euroization" is both a...
Persistent link: https://www.econbiz.de/10013109443
The valuation of government debt is subject to strategic uncertainty, stemming from investors' sentiments. Pessimistic lenders, fearing default, bid down the price of debt. This leaves a government with a higher debt burden, increasing the likelihood of default and thus confirming the pessimism...
Persistent link: https://www.econbiz.de/10013224996