Core-Periphery – An Old Theory in New Times

Abstract

The subject of this study was an attempt to discover whether and to what extent core-periphery theory can be used to describe international economic relations in the process of creating a global knowledge-based economy. To this aim the most important core-periphery theory theses were selected and tested empirically. The following results were obtained: (1) Over time the profitability of leading products falls and their production is transferred to the periphery – thesis supported. (2) This brings benefits not only to the investors but also to the societies of core nations; it counteracts a fall in living standards among groups affected by unemployment or real wage decreases and indirectly promotes political stability in core nations – thesis supported. (3) Capitalism in the core is of a financial nature – based on speculation – thesis supported. (4) Financial speculation in the core leads to political destabilisation of the periphery – thesis supported. (5) The greater participation of periphery nations in the international economic system, the greater losses they suffer – thesis unsupported. (6) the greater benefits to the core nations – thesis unsupported.