Working Paper Number
We revisit the hypotheses of unequal exchange and deteriorating terms of trade in the specific context of import-intensive, export- led strategies of developing countries which rely on integration into GVCs for access to markets in developed countries using a stylized two-country two-commodity Classical- Marxian trade model. Two sources of asymmetry can be distinguished: market power arising from the competition between suppliers that depresses the prices at which the final good is supplied; and monopoly power arising from the lead firms control and ownership of intangible assets including brand and design. The model explores some implications of these two sources of asymmetry.
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Basu, Deepankar and Vasudevan, Ramaa, "Global Value Chains and Unequal Exchange: Market Power and Monopoly Power" (2021). Economics Department Working Paper Series. 310.