Using a gravity-type explanation of international trade flows at the industry level, it is shown that the pattern of comparative advantage in terms of sectoral export/import ratios in bilateral trade can be explained by relative income and relative per capita income. Total income of a country is...

The current economic crisis has been lasting too long, and particular examples of economic growth and unemployment reduction in some countries have not been the accelerator sufficient for the global recovery. The general level of demand is low, hence so are the investments, although the most...

In this paper, I explore the impact of per capita income and population size on markups and bilateral trade flows in a random search framework. The intuition is that, when a firm randomly meets a consumer, only that consumer's income matters to the firm's pricing strategy;the size of the...