the causal connection between lack of exposure to commercial trade and proclivity to sudden stops. On the theoretical … front, I show how exposure to trade raises the creditworthiness of countries and reduces the probability of sudden stops. In … debt is more attractive. Therefore, conditional on the amount that lenders are willing to loan, decreased exposure to trade …

large country (‘the U.S.’) has a smaller effect on the terms of trade of countries that share its specialization, while … being shared fully with countries specialized in the other type of good through a terms-of-trade effect. In the presence of … complete asset markets, the trade balance reflects the flow of insurance payments. All countries who benefit little from the …