Intro -- Contents -- Series Foreword -- 1 Sustainability of Public Debt: Introduction and Overview -- 2 The Sustainability of Fiscal Policy in the United States -- 3 Sustainability and Determinants of Italian Public Deficits before and after Maastricht -- 4 Policy Adjustments and Sustainability...

We use a dynamic game model of a two-country monetary union to study the impacts of an exogenous fall in aggregate demand, the resulting increase in public debt, and the consequences of a sovereign debt haircut for a member country or bloc of the union. In this union, the governments of...