The article discusses how designing a monetary union can affect stabilization policies in a two-country world economy. The success of a monetary union depends on the central bank's commitment ability, the flexibility of fiscal authorities, and the correlation of shocks between countries. If the central bank acts before fiscal authorities and fiscal policy responds well to shocks, a monetary union can increase welfare. However, if fiscal authorities have limited tools or the central bank can't commit to its policies, a monetary union may not be beneficial.