Per Capita Income, International Trade Puzzles, and CO2 Emissions

Justin Caron and Thibault Fally

from ARE Update Vol. 18, No. 3, Jan/Feb, 2015

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Abstract

After estimating preferences and productivity across sectors and countries, we find that the cross-country differences in per capita income and their implication for consumption baskets can shed light on trade patterns and explain why there is not as much trade as we might expect from standard trade models. We also find an important role for per capita income and consumption patterns in explaining cross-country differences in CO2 emissions.

Keywords

Trade, non-homothetic preferences, income, missing trade, CO2 emissions, international trade

Citation

Justin Caron and Thibault Fally. "Per Capita Income, International Trade Puzzles, and CO2 Emissions." ARE Update 18(3)(2015):1-4. University of California Giannini Foundation of Agricultural Economics.
https://giannini.ucop.edu/publications/are-update/issues/2015/18/3/per-capita-income-interna/