; ; ; "ActiveFedora::Aggregation::ListSource" . a , ; "Fiscal Unions Redux"; ; "batchuser@example.com"; "Pastorino, Elena", "Kehoe, Patrick J."; "Federal Reserve Bank of Minneapolis"; "Cross-country externalities", "International transfers", "Optimal currency area", "Fiscal externalities", "Cross-country insurance", "International financial markets", "Cross-country transfers"; "F33 - International Monetary Arrangements and Institutions", "F42 - International Policy Coordination and Transmission", "E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination", "G33 - Bankruptcy; Liquidation", "F38 - International Financial Policy: Financial Transactions Tax; Capital Controls", "E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General", "G28 - Financial Institutions and Services: Government Policy and Regulation", "G15 - International Financial Markets", "F35 - Foreign Aid"; "Before the advent of sophisticated international financial markets, a widely accepted belief was that within a monetary union, a union-wide authority orchestrating fiscal transfers between countries is necessary to provide adequate insurance against country-specific economic fluctuations. A natural question is then: Do sophisticated international financial markets obviate the need for such an active union-wide authority? We argue that they do. Specifically, we show that in a benchmark economy with no international financial markets, an activist union-wide authority is necessary to achieve desirable outcomes. With sophisticated financial markets, however, such an authority is unnecessary if its only goal is to provide cross-country insurance. Since restricting the set of policy instruments available to member countries does not create a fiscal externality across them, this result holds in a wide variety of settings. Finally, we establish that an activist union-wide authority concerned just with providing insurance across member countries is optimal only when individual countries are either unable or unwilling to pursue desirable policies"^^; "2017-02-21"; "2019-05-17T13:45:39.536538356+00:00"^^; "https://doi.org/10.21034/sr.543"; ; "https://creativecommons.org/licenses/by-nc/4.0/"; "Thu Nov 7 21:36:45 2019"; "https://creativecommons.org/licenses/by-nc/4.0/"; "Research Paper"; "393", "594"; "Staff report (Federal Reserve Bank of Minneapolis. Research Department)"; "543"; "Optimal currency area", "Fiscal externalities", "Cross-country insurance", "Cross-country externalities", "International financial markets", "Cross-country transfers", "International transfers"; ; ; ; ; "Federal Reserve Bank of Minneapolis. Research Department"; "Published in: _Economic Theory_ (64(4), December 2017, pp. 741-776) https://doi.org/10.1007/s00199-016-1016-x."^^; ; "Publication" . ; .