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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 - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)

  • Fernando Jaramillo

    ()

    (Universidad de los Andes - Universidad de Los Andes)

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-00429016.

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Date of creation: Nov 2009
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Publication status: Published in Journal of International Economics, Elsevier, 2009, 79 (2), pp.248-258. <10.1016/j.jinteco.2009.07.008>
Handle: RePEc:hal:cesptp:halshs-00429016
DOI: 10.1016/j.jinteco.2009.07.008
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00429016
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