We thank Manuel Diaz de la Fuente and Julian Tsang for outstanding research assistance, and seminar and conference participants at CEPR-Kiel Geoeconomics Conference, Bocconi, Bank of Italy, IFO, LSE, Munich, Stanford, the SED-AM (Athens) and the HeiTuHo Conference. The views expressed are those of the authors and do not necessarily reflect those of the University of Texas at Austin or the National Bureau of Economic Research.