Alain Desdoigts () (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) Fernando Jaramillo () (Universidad del Rosario - Facultad de Economia)
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Will the integration of BRIC (Brazil, Russia, India and China) into the global economy provide the biggest boost to the world economy since the industrial revolution ? In this paper, we investigate international demand spillovers brought about by an emerging global middle class and their impact on the international structure of production. We put forth a many-industry and two-country trade model featuring international competition, non-homothetic preferences and country-specific asymmetries in income distribution, productivity and population size. Its key characteristic is the introduction of demand complementarities propagating increasing returns across industries and national boundaries, which eventually translate into a global profit-multiplier.
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Paper provided by HAL in its series Post-Print with number
halshs-00111186_v2.
Length: Date of creation: Feb 2006 Date of revision: Handle: RePEc:hal:journl:halshs-00111186_v2
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