Attributing the foreign trade effects of an expansion in the state budget to a single cause cannot do justice to the multitude of macro-economic interrelationships. Both theory and observation can reveal quite differing links between the public sector financial balance, the balance of payments...

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...