Sovereign Debt Booms in Monetary Unions
构建连续时间模型，研究通胀可信度如何影响主权债务动态，发现通胀可信度大幅提升可能触发债务积累，解释低通胀可信度国家加入货币联盟后常出现的债务激增现象。
We 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.