The paper provides an explanation of the mechanisms underlying trade <p> roots of the contagion effects emanating from the recent turmoils. It is argued <p> that under demand uncertainty risk averse behavior of firms provides a basis <p> for international trade. The paper shows by means of a simple...</p></p></p>

The paper focuses on the question of how labor market regulations can affect a country’s competitive position in international trade and international trade patterns. The analysis shows that differences in labor market flexibility between countries affect their competitive positions in...