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Vol. 67, No. 4, pp. 289-306 (2016)

“Unequal Exchange in the International Economy”
Naoki Yoshihara (Department of Economics, University of Massachusetts Amherst), Soh Kaneko (Faculty of Economics, Keio University)

This paper provides a survey on recent developments on analysis of unequal exchange (UE) between rich and poor nations under international economies. Like the Heckscher-Ohlin-Samuelson trade theory, we suppose that all nations can access to a common set of production techniques but their capital endowments differ from each other, where rationally chosen intertemporal resource allocations and a sequence of market prices constitute a dynamic competitive equilibrium. Given such a framework, firstly in international economies with no international transfer of capital and labor, the generation and persistency of unequal exchange are characterized by Yoshihara and Kaneko (2016a, 2016b). Secondly, in international economies with international credit markets, the generation of exploitative class structure of international relations is characterized as the Class-Exploitation Correspondence Principle (CECP) and Wealth-Exploitation Correspondence Principle (WECP) by Veneziani and Yoshihara (2016).