Unequal Exchange

Unequal exchange, in Köhler's monetary formulation, measures the transfer that arises because exchange rates deviate persistently from purchasing-power parity: peripheral economies receive fewer hours of embodied labor than they give.^[1] One observable correlate is the labor share of income, which differs systematically across the world-system classes.

The current-account differences by class show how the measured transfers map onto recorded external balances.

1. Gernot Köhler (2003). The Structure of Global Money and World Tables of Unequal Exchange. Journal of World-Systems Research.