Abstract
Growth in international trade between countries at different levels of development is one of the main drivers of economic globalization. This phenomenon relates to the new international division of labour in which an Emerging Periphery, hosting the offshoring and outsourcing of world manufacturing, stands between a developed Center and a still backward, Poor Periphery. Following the analysis of the relative and absolute indices of global locational inequality, the effect of the unequal exchange on world income distribution in the last 25 years is investigated. A new methodology based on real currency misalignments and value-added trade is presented, which accounts also for international value transfers within global value chains. The counterfactual test shows that trade value transfers represent a significant source of revenue for the Center diverted from the Peripheries. Unequal exchange widens the opportunity gap between citizens of rich and poor countries through an increase in global locational inequality. Redefining post-pandemic international economic rules should therefore recognize the effect of unequal exchange on global inequality.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
