Fornaro, LucaGrosse-Steffen, ChristophUniversitat Pompeu Fabra. Departament d'Economia i Empresa2024-11-142024-11-142024-04-01http://hdl.handle.net/10230/68622We provide a theory of financial fragmentation in monetary unions. Our key insight is that currency unions may experience of symmetry: that is episodes in which identical countries react differently when exposed to the same shock. During these events part of the union suffers a capital flight, while the rest acts as a safe haven and receives inflows. The central bank then faces a difficult trade-off between containing unemploymnet in capital-flight countries, and inflationary pressures in safe-haven ones. By counteracting private capital flows with public ones, unconventional monetary interventions mitigate the impact of financial fragmentation on employment and inflation, thus helping the central bank to fulfill its price stability mandate.application/pdfengL'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative CommonsFragmented monetary unions<resourceType xmlns="http://datacite.org/schema/kernel-3" resourceTypeGeneral="Other">info:eu-repo/semantics/workingPaper</resourceType><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">monetary unions</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">euro area</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">fragmentation</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">optimal monetary policy in openeconomies</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">capital flows</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">fiscal crises</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">unconventional monetary policies</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">inflation</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">endogenous breaking of symmetry</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">optimum</subject><rights xmlns="http://datacite.org/schema/kernel-3">info:eu-repo/semantics/openAccess</rights>