||Globalisation and Inequality in a Dynamic Economy: An Axiomatic Analysis of Unequal Exchange
VENEZIANI, RobertoYOSHIHARA, Naoki
2017-02 , Hitotsubashi Institute for Advanced Study, Hitotsubashi University
An axiomatic analysis of the concept of unequal exchange (UE) between countries is developed in a dynamic general equilibrium model that generalises Roemer’s  economy with a global capital market. The class of UE definitions that satisfy three fundamental properties - including a correspondence between wealth, class and UE exploitation status - is completely characterised. It is shown that this class is nonempty and a definition of UE exploitation between countries is proposed, which is theoretically robust and firmly anchored to empirically observable data. The full class and UE exploitation structure of the international economy is derived in equilibrium.