Linder hypothesis

The Linder hypothesis is an economic theory that suggests countries with similar levels of income and economic development are more likely to trade goods with each other. This is because they have comparable demands and preferences for products. For instance, a wealthy country is likely to export goods that match the income and tastes of another wealthy country, rather than trading with a poorer country that may want different products. Essentially, the hypothesis highlights that economic similarity fosters trade relationships, as consumers in similar economies will seek out products that appeal to their needs and lifestyles.