Colin Ward

TL;DR: This paper showed that countries that primarily export basic commodities exhibit systematically high (real) interest rates while countries that specialize in exporting finished consumption goods typically have lower rates, and that the resulting interest rate differentials do not fully translate into the depreciation of the commodity currencies, on average.

TL;DR: This paper developed a general equilibrium model of international trade and currency pricing where countries have an advantage in producing either basic inputs or final goods in the model domestic production insulates commodity-producing countries from global productivity shocks, forcing final-good producers to absorb them.

TL;DR: This article developed a general equilibrium model of international trade and currency pricing in which countries have an advantage in producing either basic input goods or final consumable goods, and the model predicts that commodity-producing countries are insulated from global productivity shocks through a combination of trade frictions and domestic production, while the final good producers that drive the global business cycle also absorb the shocks.

TL;DR: In this paper, a two-country general equilibrium model was proposed to explain 57% of the narrowing of interest rate differentials post-crisis by using global shipping data, showing that slow adjustment in the shipping sector generates boom-bust cycles in freight rates and, as a consequence, in currency risk premia.

TL;DR: The authors construct an asset pricing model with explicit default to develop a risk-based source of the distress anomaly and show that distress produces sharply countercyclical betas leading to biased estimates of risk premia and alphas.