In the context of a multi-country, multisector general equilibrium model, they show that, as global value chain relations intensify, the effects of trade cost shocks are amplified. The amplification effects crucially depend on global value chain-related components of trade. [22] See Bloom, N. (2009), “The Impact of Uncertainty Shocks”, Econometrica, Vol.
77, No 3, May; and Handley, K. and Limão, N. (2015), “Trade and Investment under Policy Uncertainty: Theory and Firm Evidence”, American Economic Journal: Economic Policy, vol. 7(4), pp.189-222.