Supplement to "Engel’s Law in the Global Economy: Demand-Induced Patterns of Structural Change, Innovation, and Trade"

This appendix explains in detail why we use the particular class of preferences, isoelastically nonhomothetic CES, eq.(1), and why this must satisfy (direct and indirect) implicit additivity.  To this end, we recall different notions of additivity. To simplify the exposition, we only consider the case of a continuum of infinitesimal consumption goods.

Supplemental Authors: 
Matsuyama, Kiminori - Northwestern University
Online Appendix