We analyse the international transmission of interest rates by focusing on the role of the accumulation of international reserves and on the financing of sovereign debt. An increase in foreign exchange reserves is expected to moderate the influence of U.S. interest rates. However, a high level...

The euro area crisis highlights the issue of sovereign debt in a heterogeneous monetary union. This heterogeneity concerns, in particular, inflation rates, GDP growth rates, current account balances and ratios of public deficits and debts to GDP. This paper mainly aims to investigate such...