; ; ; "ActiveFedora::Aggregation::ListSource" . a , ; "Coordination and Crisis in Monetary Unions"; ; "batchuser@example.com"; "Amador, Manuel", "Gopinath, Gita, 1971-", "Aguiar, Mark", "Farhi, Emmanuel"; "Federal Reserve Bank of Minneapolis"; "Fiscal policy ", "Debt crisis", "Coordination failures", "Monetary union"; "F30 - International Finance: General", "E40 - Money and Interest Rates: General", "F40 - Macroeconomic Aspects of International Trade and Finance: General", "E50 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General"; "We study fiscal and monetary policy in a monetary union with the potential for rollover crises in sovereign debt markets. Member-country fiscal authorities lack commitment to repay their debt and choose fiscal policy independently. A common monetary authority chooses inflation for the union, also without commitment. We first describe the existence of a fiscal externality that arises in the presence of limited commitment and leads countries to over-borrow; this externality rationalizes the imposition of debt ceilings in a monetary union. We then investigate the impact of the composition of debt in a monetary union, that is the fraction of high-debt versus low-debt members, on the occurrence of self-fulfilling debt crises. We demonstrate that a high-debt country may be less vulnerable to crises and have higher welfare when it belongs to a union with an intermediate mix of high- and low-debt members, than one where all other members are low-debt. This contrasts with the conventional wisdom that all countries should prefer a union with low-debt members, as such a union can credibly deliver low inflation. These findings shed new light on the criteria for an optimal currency area in the presence of rollover crises."^^; "2015-05-11"; "2019-05-17T14:15:09.194986199+00:00"^^; "https://doi.org/10.21034/sr.511"; ; "https://creativecommons.org/licenses/by-nc/4.0/"; "2019-11-08T20:01:47.259545773+00:00"^^; "https://creativecommons.org/licenses/by-nc/4.0/"; "Research Paper"; "228", "22", "4", "283"; "Staff report (Federal Reserve Bank of Minneapolis. Research Department)"; "511"; "Monetary union", "Coordination failures", "Fiscal policy ", "Debt crisis"; ; ; ; ; "Federal Reserve Bank of Minneapolis. Research Department"; "Published in: _The Quarterly Journal of Economics_ (Vol. 130, Iss. 4, November 2015, pp. 1727–1779), https://doi.org/10.1093/qje/qjv022."^^; ; "Publication" . ; .