The paper shows that in a stylized model with two countries, characterized bydifferent levels of nancial development, the following facts can be replicated: 1)persistent current account surpluses and 2) high TFP growth in China. Because ofliquidity shocks and credit constraints, investment by...

This paper studies how liability dollarization conditions the effectof exchange rate exibility on growth. It develops a model with creditconstrainedrms facing liquidity shocks denominated in tradables while theirrevenues are both in tradable and nontradables. With frictions in the...

Financialisation, or the disproportionate importance of financial considerations in economic decisions, has been a defining feature of the economic history of the last twenty-five years. The wave of deregulation that accompanied the neoliberal agenda in the US, aided by the dominance of US...