The authors study the nature of the optimal monetary policy in a regime of fiscal dominance when the monetary authority—which can print money or issue interest-earning debt—is required to finance an exogenous sequence of transfers to the Treasury. They show that the degree of commitment on...

In monetary unions, monetary policy is typically made by delegates of the member countries. This procedure raises the possibility of 'strategic delegation' - that countries may choose the types of delegates to influence outcomes in their favor. We show that without commitment in monetary policy,...