International Liquidity: The Fiscal Dimension
Maurice Obstfeld
No 11-E-22, IMES Discussion Paper Series from Institute for Monetary and Economic Studies, Bank of Japan
Abstract:
All schemes to enhance global liquidity require a higher level of fiscal support and coordination from the international community. Loans to troubled sovereigns or financial institutions imply a credit risk that ultimately must be lodged somewhere. Expanded international lending facilities, including an expanded International Monetary Fund, require an expanded level of fiscal backup. The same point obviously applies to the European framework for managing internal sovereign debt problems, including proposals for a jointly guaranteed euro zone sovereign bond. Even attainment of a significant role for the Special Drawing Rights depends upon enhanced fiscal resources and burden sharing at the international level.
Keywords: International liquidity; Sovereign debt; Euro zone crisis; Fiscal union; International Monetary Fund; Special Drawing Rights (search for similar items in EconPapers)
JEL-codes: F33 F34 F36 H87 (search for similar items in EconPapers)
Date: 2011-09
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Citations: View citations in EconPapers (29)
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Working Paper: International Liquidity: The Fiscal Dimension (2011) 
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Persistent link: https://EconPapers.repec.org/RePEc:ime:imedps:11-e-22
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