Economics Department Working Paper Series
Working Paper Number
2021-13
Publication Date
2021
Abstract
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.
DOI
https://doi.org/10.7275/23745731
License
UMass Amherst Open Access Policy
Recommended Citation
Basu, Deepankar and Vasudevan, Ramaa, "Global Value Chains and Unequal Exchange: Market Power and Monopoly Power" (2021). Economics Department Working Paper Series. 310.
https://doi.org/10.7275/23745731