The model has four assets: domestic and foreign money and bonds. It is a two country macro model, with debt defined in terms of the net asset holdings of the domestic country. Asset flows between the domestic and foreign country are driven by the interaction between the current and capital...

This paper highlights the importance of having a strong alternative world currency in order to place a constraint on the ability of a single dominant world currency being able to extract resources from the rest of the world through monetary policy. The effects of monetisation of the budget...