Kalina Manova and Zhihong Yu analyze customs and balance sheet data on Chinese firms that are involved in "import and assembly" processing trade -- in which the processing firm pays for imported inputs -- and "pure assembly trade" in which the processing firm receives imported inputs for free. They find that profits, profitability, and value-added all decline when exporters orient their sales away from import-and-assembly and towards pure assembly. They also find that limited access to capital restricts firms to low value-added stages of the supply chain and keeps them from pursuing more profitable opportunities.

Edward Wolff finds that between 2007 and 2010, median household wealth in the United States plummeted to its lowest level since 1969 and that household net worth became more unequal. He suggests that those declines can be traced to the high leverage of middle class families in 2007 and to the high share of homes in their portfolio. He also finds that Hispanics were particularly hurt by the Great Recession, in terms of net worth and net equity in their homes. Households under age 45 also experienced sharp declines in their relative and absolute wealth from 2007 to 2010.

Embedded leverage is the amount of market exposure per unit of committed capital associated with a security. Many financial instruments, including options and leveraged exchange traded funds, are designed with embedded leverage. Andrea Frazzini and Lasse Pedersen find that asset classes with embedded leverage offer low risk-adjusted returns. They conclude that a portfolio long in low-embedded-leverage securities and short in high-embedded-leverage securities earns large abnormal returns.

Sebastian Edwards analyzes weekly data from seven emerging nations -- Brazil, Chile, Colombia, Mexico, Indonesia, Korea, and the Philippines -- all of which had flexible exchange rates and followed some kind of inflation targeting during the period he examines. He confirms that there is interest-rate “pass through” from the U.S. Federal Reserve System to these emerging markets during the 2000s. However, the transmission of interest rate shocks differs -- in terms of impact, steady state effect, and dynamics -- in Latin America and Asia. He also finds little evidence that capital controls can isolate emerging countries from global interest rate disturbances.

Geert Bekaert and Alexander Popov find a positive short-term relationship between the volatility and skewness of growth in a sample of 110 countries. This relationship is driven by differences in the rate of industrialization, macroeconomic stabilization, and in the discovery and exploitation of natural resources in mostly developing countries. However, in panel data looking at the longer term, they find a negative relationship between volatility and skewness, driven by business cycle variation in rich countries. They suggest that this correlation is due to sudden and short-lived growth spurts in mostly developing countries and sharp crises in mostly developed countries.