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Commodity Chains, Unequal Exchange and Uneven Development

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  • Cem Somel

    (Department of Economics, METU)

Abstract

Research shows an uneven partition of value added along commodity chains between transnational firms and producers in developing countries. This paper briefly discusses how such a distribution occurs and how it leads to unequal exchange in trade. A North-South trade model reveals the uneven development consequences of this exchange. The terms of trade between North and South help maintain a gap in capital accumulation between the two regions. The model reveals that capital flows covering the trade deficit of the South with the North may help stimulate the unrequited transfer of real resources from South to North.

Suggested Citation

  • Cem Somel, 2004. "Commodity Chains, Unequal Exchange and Uneven Development," ERC Working Papers 0411, ERC - Economic Research Center, Middle East Technical University, revised Sep 2004.
    • Handle: RePEc:met:wpaper:0411
    as

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    File URL: http://erc.metu.edu.tr/en/system/files/menu/series04/0411.pdf
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    References listed on IDEAS

    as
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    7. Wood, Adrian, 1995. "North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World," OUP Catalogue, Oxford University Press, number 9780198290155, Decembrie.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Unequal exchange; development; commodity chains;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F2 - International Economics - - International Factor Movements and International Business
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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