Linder Hypothesis

Linder Hypothesis is a terms of economics, which was proposed by Staffan Linder in 1961. It suggests countries will specialize in the production of certain high quality goods, and will trade these goods with countries that demand these goods. It presents a demand based theory of trade in contrast to the usual supply based theories involving factor endowments. It focuses on high quality goods because the production of those goods are more likely to be capital-intensive.