@techreport{a1591b6a50474cf0a8dbd2c11ce4f9ac,
title = "Hub and spoke bilateralism and the global income distribution",
abstract = "We study the effects of hub and spoke liberalization in a model where income matters for consumption patterns. We use 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 has a comparative advantage in the production of lowest-ranked (highest-ranked) goods, specializing in goods with low (high) income elasticities in demand. The medium rich country specializes in the production of the intermediate-ranked commodities. We find that a country{\textquoteleft}s income level is of decisive importance for assessing the impact of hub and spoke arrangements on welfare. Hubs do not necessarily gain and spokes do not necessarily lose.",
keywords = "Economics and econometrics, Ricardian trade model, asymmetric demand complementarities, nonhomothetic preferences",
author = "Joachim Stibora and \{de Vaal\}, Albert",
year = "2006",
month = oct,
language = "English",
series = "Economics Discussion Paper",
publisher = "Faculty of Arts and Social Sciences, Kingston University",
number = "2006/7",
type = "WorkingPaper",
institution = "Faculty of Arts and Social Sciences, Kingston University",
}