the causal connection between lack of exposure to commercial trade and proclivity to sudden stops. On the theoretical … front, I show how exposure to trade raises the creditworthiness of countries and reduces the probability of sudden stops. In … debt is more attractive. Therefore, conditional on the amount that lenders are willing to loan, decreased exposure to trade …

Openness to trade is one factor that has been identified as determining whether a country is prone to sudden stops in … problem that trade is endogenous. Using the gravity instrument for trade openness, which is constructed from geographical … determinants of bilateral trade, this paper finds that openness indeed makes countries less vulnerable, both to severe sudden stops …

study estimates theoretically founded trade balance reaction functions for a panel of seventy countries from 1970-2004. The … empirical analysis finds that adjustment in integrated economies is slower. Consistent with the presented theory the trade …

This paper discusses the difference between Fisherian and Ricardian trade in terms of a simple two-period model of a … small open economy. Fisherian or intertemporal trade occurs when goods are traded today against the promise to deliver goods … in the future. The resulting net resource transfer is equal to an international flow of capital. Ricardian trade occurs …