We develop a Ricardian trade model with a continuum of goods that are ordered according to priority in consumption. Go o ds at the lower end of the spectrum are consumed by all households and when income increases households add higher-ranked goods to their consumption baskets. We apply this...

We study the effects of preferential trade agreements (PTA) in a model where income matters for consumption patterns. We develop a three-country Ricardian trade model in which goods are ranked according to priority and where economies differ in their income level. The poorest (richest) country...

The past decades have witnessed falling wage shares and a polarization of personal income distribution. Average wages and average labour compensation have not kept up with productivity growth. Functional income distribution has shifted at the expense of labour. In many countries personal income...