The present governance of the euro area has been devised assuming that the world fits the
monetarist‐real‐business‐cycle theory. But that theory is not a correct representation of the …

This paper formally examines the implications of international consumption risk sharing for a
panel of industrialized countries. We theoretically derive the international consumption …

In this paper we discuss the achievements and the challenges of the Eurozone. We first
analyze the record with respect to inflation. Second, we discuss the degree of price …

Cross-country evidence on consumption, income, saving, and investment indicates that
there remain opportunities for international risksharing. One explanation for the lack of …

The loss of the exchange rate as an independent policy insrument implied by European
monetary union calls for an insurance scheme as a buffer against asymmetric shocks. We …

The current debt crisis has given rise to a debate concerning deeper fiscal integration in
Europe. The view is widespread that moving towards a 'fiscal union'would have stabilizing …

This paper evaluates the trade-off between the advantages of risk sharing and the perils of
common pool problems in federal fiscal arrangements. Under the assumption of asymmetric …

European policymakers have repeatedly suggested that fiscal-policy coordination and fiscal
federalism will play key roles in Europe's monetary union. This paper warns that this hope is …

The introduction of the euro in 1999 is without any doubt one of the great achievements in
the European integration process. In one bold stroke national monetary sovereignty was …

This contribution develops a blueprint for a European fiscal union. We argue that a viable
European fiscal union can be constructed without joint liability for public debt or a …