Eppinger, Peter S.; Felbermayr, Gabriel J. - ifo Leibniz-Institut für Wirtschaftsforschung an der … - 2014
We use an augmented gravity model to revisit the effect of similarity in income distributionson bilateral trade flows. Disentangling supply-side and demand-side mechanisms,we document a robust new regularity: while differences in average incomes betweentwo countries increase trade, differences...