Global Stratification Economics and International Extraction

Brendan Brundage (), William Darity Jr. () and Daniele Tavani ()
Additional contact information
Brendan Brundage: Department of Economics, Morehouse College, USA
William Darity Jr.: Duke University, USA
Daniele Tavani: Department of Economics, Colorado State University, USA

No 2609, Working Papers from New School for Social Research, Department of Economics

Abstract: This paper develops a formal model of Global Stratification Economics to explain how international economic relationships can reproduce inequality between a relatively powerful core and a comparatively disadvantaged periphery. The core extracts a share of peripheral output, while integration may simultaneously provide gains through trade, investment, finance, and technology. Our central result is that hierarchy can become self-reproducing when relative power lowers the cost of extraction: extraction reinforces the capital advantage that makes further extraction easier. When this feedback is sufficiently strong, the model admits multiple equilibria and a stratification trap; when it is weaker, a unique but unequal equilibrium persists. Peripheral development therefore need not imply convergence, since integration can raise peripheral income while relative inequality widens. We calibrate the power–extraction relationship using unequal-exchange estimates and Penn World Table data. Annual estimates imply a positive enforcement elasticity of approximately 0.50 using the original WIOD release for 1995–2009. These results suggest that power-dependent extraction is empirically relevant and may place the global economy near the boundary between unique and history-dependent stratification.

JEL-codes: F54 F63 O11 O19 P16 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2026-08
References: Add references at CitEc
Citations:

Downloads: (external link)
https://repec.economicpolicyresearch.org/econ/2026/NSSR_WP_092026.pdf First version, 2026 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:new:wpaper:2609

Access Statistics for this paper

More papers in Working Papers from New School for Social Research, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Mark Setterfield ().