01679cas a2200241 a 4500 AALejournalIMF005317 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451870671 1018-5941 BD-DhAAL BD-DhAAL Adler, Gustavo. Original Sin and Procylical Fiscal Policy : Two Sides of the Same Coin? / Gustavo Adler. Washington, D.C. : International Monetary Fund, 2008. 1 online resource (27 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The paper develops a simple model of sovereign debt where default both through direct repudiation and through inflation are possible and give rise to (endogenous) constraints on the currency composition and the level of public debt. This set up allows to show that procyclicality of fiscal policy in EMEs can arise as a by-product of the "original sin" and both can be explained by the presence of weak monetary institutions which cannot commit to price stability. The paper suggests that, as monetary institutions in EMEs strengthen, the "original sin" would fade away and the cyclical properties of fiscal policy would improve. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2008/209 Full text available on IMF http://elibrary.imf.org/view/journals/001/2008/209/001.2008.issue-209-en.xml IMF e-Library