The unprecedented sovereign debt crisis across the European Monetary Union has prompted a new generation of models with "self-fulfilling" attacks to public debt. The key idea is that governments may be forced to default even though initial fundamental fiscal variables are sound. The model...

When inflation picks up, central banks are most concerned that the de-anchoring of inflation expectations and the ignition of wage-price spirals will trigger inflation dynamic instability. However, such scenarios do not materialize in the standard New Keynesian theoretical framework for monetary...

When inflation picks up, central banks are most concerned that the de-anchoring of inflation expectations and the ignition of wage-price spirals will trigger inflation dynamic instability. However, such scenarios do not materialize in the standard New Keynesian theoretical framework for monetary...

The euro area crisis shows some similarities with the crisis that affected the European Monetary System in 1992-93. I argue that the theoretical framework to be used in order to analyze it can also be similar. As a matter of fact, together with the point of view of the government, that should...

The paper surveys old and new theories of optimum currency areas by following a unifying "logical" rather than "chronological" approach. The fall of credibility theory as the "new" theory of optimum currency areas obliged to go back to the "old" criteria while focusing, however, also on supply...

The predictions made by economists of the value of the euro prior to its introduction were essentially based on the expected portfolio adjustment resulting from the role that it might play as an international currency. As a result, most analysts agreed that the euro would be a strong currency,...