Leverage Constraints and the International Transmission of Shocks
---- Acknowledgements -----
Devereux thanks the Federal Reserve Bank of Dallas for hospitality and support. Devereux also thanks the Bank for International Settlements, Bank of Canada, SSHRC and the Royal Bank of Canada for financial support. The views expressed here are those of the authors and do not necessarily reflect those of the Bank for International Settlements, the Bank of Canada, or the National Bureau of Economic Research. We thank, without implication, Phil Wooldridge for advice on data and seminar participants at the JMCB/Board of Governors Conference Financial Markets and Monetary Policy, June 4-5, 2009, and People's Bank of China - Bank for International Settlements Conference The International Financial Crisis and Policy Challenges in Asia and the Pacific, August 6-8, 2009, for comments, including in particular the discussants, Paolo Pesenti and Kyungsoo Kim. This paper was written while the first author was visiting the Reserve Bank of Australia and the Bank for International Settlements. He is grateful for the warm hospitality and resources provided by both institutions.