This paper presents a theoretical framework to highlight possible channels for the
international transmission of financial shocks. We first review the different definitions and …

This article provides an overview of recent research into the macroeconomic costs and
benefits of monetary unification. We are primarily interested in Europe's monetary union …

Much of the current debate on reforming the international financial architecture is aimed at
reducing the risks of contagion—best defined as a significant increase in cross-market …

The central puzzle in international business cycles is that fluctuations in real exchange rates
are volatile and persistent. We quantify the popular story for real exchange rate fluctuations …

Abstract Changes in sovereign debt ratings and outlooks affect financial markets in
emerging economies. They affect not only the instrument being rated (bonds) but also …

We develop a baseline model of monetary and fiscal transmission in interdependent
economies. The welfare effects of expansionary policies are related to monopolistic supply …

The 1990's has been punctuated by a series of severe financial and currency crises: the
Exchange Rate Mechanism (ERM) attacks of 1992; the Mexican peso collapse of 1994; the …

This paper develops an interpretation of the Asian meltdown focused on moral hazard as the
common source of overinvestment, excessive external borrowing, and current account …

This paper provides a baseline general equilibrium model of optimal monetary policy among
interdependent economies with monopolistic firms and nominal rigidities. An inward-looking …

We show that even when the exchange rate cannot be devalued, a small set of conventional
fiscal instruments can robustly replicate the real allocations attained under a nominal …