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Trade, demand spillovers and industrialization : The emerging global middle class in perspective

  • Alain Desdoigts


    (Université Paris-Est - Cité Descartes, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)

  • Fernando Jaramillo


    (Universidad del Rosario - Facultad de Economia)

In this paper, we investigate international demand spillovers brought about by a global middle class and their impact on trade patterns and industrialization. We propose a multi-industry and two-country trade model featuring demand complementarities propagating increasing returns across industries and national boundaries. We show how the international extent of demand spillovers depends upon asymmetries in domestic income distribution, labor efficiency, and labor force size ; that is, on the global distribution of real income.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00111186.

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Date of creation: Feb 2006
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Handle: RePEc:hal:cesptp:halshs-00111186
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  13. Pundarik Mukhopadhaya, 2004. "World Income Inequality data base (WIID) Review," Journal of Economic Inequality, Springer, vol. 2(3), pages 229-234, December.
  14. Francois, Joseph F & Kaplan, Seth, 1996. "Aggregate Demand Shifts, Income Distribution, and the Linder Hypothesis," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 244-50, May.
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  17. L. Alan Winters & Shahid Yusuf, 2007. "Dancing with the Giants: China, India, and the Global Economy," World Bank Publications, The World Bank, number 6632, March.
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