The lack of monetary independence in the eurozone played a “central role” in making its governments vulnerable to a rollover debt crisis, a team of researchers from the Federal Reserve Bank of Minneapolis say.  

In the paper, Javier Bianchi and Jorge Mondragon use a sovereign debt model to simulate the Spanish experience of the eurozone debt crisis if they had monetary autonomy.  

The authors argue the Spanish economy entered the eurozone sovereign debt “crisis zone” in 2012. They then