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dc.contributor.authorAguiar, Mark
dc.contributor.authorAmador, Manuel
dc.contributor.authorFarhi, Emmanuel
dc.contributor.authorGopinath, Gita
dc.date.accessioned2014-07-23T18:39:16Z
dc.date.issued2014
dc.identifier.citationAguiar, Mark, Manuel Amador, Emmanuel Farhi, and Gita Gopinath. 2014. “Sovereign Debt Booms in Monetary Unions.” American Economic Review 104, no. 5: 101–106.en_US
dc.identifier.issn0002-8282en_US
dc.identifier.urihttp://nrs.harvard.edu/urn-3:HUL.InstRepos:12559514
dc.description.abstractWe propose a continuous time model to investigate the impact of inflation credibility on sovereign debt dynamics. At every point in time, an impatient government decides fiscal surplus and inflation, without commitment. Inflation is costly, but reduces the real value of outstanding nominal debt. In equilibrium, debt dynamics is the result of two opposing forces: (i) impatience and (ii) the desire to conquer low inflation. A large increase in inflation credibility can trigger a process of debt accumulation. This rationalizes the sovereign debt booms that are often experienced by low inflation credibility countries upon joining a currency union.en_US
dc.description.sponsorshipEconomicsen_US
dc.language.isoen_USen_US
dc.publisherAmerican Economic Associationen_US
dc.relation.isversionofdoi:10.1257/aer.104.5.101en_US
dash.licenseOAP
dc.subjectPrice Levelen_US
dc.subjectInflationen_US
dc.subjectDeflationen_US
dc.subjectInterest Rates: Determination, Term Structure, and Effectsen_US
dc.subjectInternational Monetary Arrangements and Institutionsen_US
dc.subjectNational Debten_US
dc.subjectDebt Managementen_US
dc.subjectSovereign Debten_US
dc.titleSovereign Debt Booms in Monetary Unionsen_US
dc.typeJournal Articleen_US
dc.description.versionAccepted Manuscripten_US
dc.relation.journalAmerican Economic Reviewen_US
dash.depositing.authorGopinath, Gita
dc.date.available2014-07-23T18:39:16Z
dc.identifier.doi10.1257/aer.104.5.101*
workflow.legacycommentsFAR 2014en_US
dash.contributor.affiliatedGopinath, Gita
dash.contributor.affiliatedFarhi, Emmanuel


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