Trade finance, particularly in the form of short-term letters of credit has received favourable capital treatment new … created leverage ratio for trade. This paper offers a relatively simple model approach showing the conditions under which the … ratio on trade instruments seems to support the analytical framework developed in this paper …

production capacity undermines their output price, worsening their terms of trade. From an ex-ante perspective each firm … undermines the natural “terms of trade hedge.” Second, sudden stops and fire sales lead to sharp price drops of illiquid capital …

large parts of the world. In this paper we explore the financial and the trade channel in a unified framework and quantify … losses in the value of cross-border asset holdings. Calibrated to German data, the model predicts the trade channel to be …. The transmission via the financial channel triggers a much longer-lasting recession relative to the trade channel …

This paper examines global (mature market) and regional (emerging market) spillovers in local emerging stock markets … America, and the Middle East. The models capture a range of possible transmission channels: Spillovers in mean returns … suggest that spillovers from regional and global markets are present in the vast majority of EMEs. However, the nature of …

Russia. The adopted framework allows to analyse interdependence by estimating volatility spillovers, and also contagion by … spillovers between the three CEECs considered and the UK (contagion) …