Sudden Stops, Sectoral Reallocations, and the Real Exchange Rate
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This paper has benefited from discussions with George Alessandria, David Backus, Michael Devereux, Patrick Kehoe, Enrique Mendoza, Carlos Végh, and the participants at the Micro Foundations of Real Exchange Rates Conference at the Carnegie Bosch Institute, the Workshop on Structural Analysis of Business Cycles in the Open Economy at the Sveriges Riksbank, the XXXI Simposio del Análisis Económico, the New Perspectives on Financial Globalization Conference at the International Monetary Fund, and seminars at Arizona State University, UCLA, MIT, and Washington University in St. Louis. This work was undertaken with the support of the National Science Foundation under grant SES-0536970. All of the data used in this paper are available at www.econ.umn.edu/~tkehoe. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Minneapolis, the Federal Reserve System, or the National Bureau of Economic Research.