The study looked at how trend productivity shocks and financial frictions affect business cycles in emerging countries. By using advanced mathematical methods and data analysis, the researchers found that trend productivity shocks are crucial in explaining these cycles. They also discovered that in a more detailed analysis, debt becomes riskier and people save more as a precaution, which reduces the impact of financial frictions and temporary productivity changes. Even though financial frictions don't magnify temporary productivity shocks as much as in simpler models, they still play a significant role in explaining the trade balance compared to the country's economic output.