Schabert, Andreas2011-02-082011-02-082011-02-08http://hdl.handle.net/2003/2760910.17877/DE290R-445We examine monetary policy options for a small open economy where sovereign default might occur due to intertemporal insolvency. Under interest rate policy and floating exchange rates the equilibrium is indetermined. Under a fixed exchange rate the equilibrium is uniquely determined and independent of sovereign default.enDiscussion Paper / SFB 823 ; 07/2011EquilibriumIntertemporal insolvencyMonetary policy optionsSmall open economy310330620working paper