Trade and Capital Flows: A Financial Frictions Perspective
---- Acknowledgements -----
We are grateful to Davin Chor, Elhanan Helpman, Kalina Manova, Jim Markusen, and seminar participants at MIT, LSE, Stanford and the 2007 NOITS conference for useful comments. We thank Sergi Basco and especially Eduardo Morales for valuable research assistance. Caballero thanks the NSF for financial support. First draft: May 11, 2007. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.