Prepared for 2014 International Seminar on Macroeconomics, Riga, June 27-28 2014. We are grateful for feedback from our discussants Gian Maria Milesi-Ferretti and Bob McCauley. We thank Jeff Frankel, the participants of the 2014 International Seminar on Macroeconomics conference and seminars at the European Central Bank and Trinity College Dublin for comments. We thank Rogelio Mercado, Caroline Mehigan and Alex Redmond for research assistance. Benetrix thanks the Irish Research Council and Lane thanks the Institute for New Economic Thinking for financial support. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
