Core periphery model

Question 1

The core

Answer 1

Friedman argued that uneven growth is caused by a natural advantage (e.g. strategic position on a trading route like Antwerp or a rich wealth of raw materials like the USA).
The ‘core’ has this natural advantage and other areas do not.

Question 2

Backwash effects

Answer 2

Over time, the imbalance between the natural advantage of the core and other areas (the periphery) becomes larger.
Migrants, resources and investment continue to move from the periphery towards the core.
The movement of these people, resources and capital are called backwash effects.
Free trade, free migration and deregulated financial/capital markets are important for allowing these backwash effects to happen.
Investment and migration are all towards the core.

Question 3

Migration maximises output

Answer 3

Migration is an efficient way to maximise the output of the whole system (in the world).
People move to the most productive place (the core) where output and profits are maximised.
Friedman argued that borders should be open to facilitate this.

Question 4

Trickle down effect

Answer 4

Some economists argue that there are negative backwash effects, with the periphery being harmed by things like brain drain (everyone leaving a country).
However, Friedman argued that negative backwash effects are balanced by positive spread effects (where the profits and output of the core trickle down to the periphery).

Question 5

Backwash vs spread effects

Answer 5

Measuring the size of negative backwash effects is very difficult. They include many social and political judgments and are subjective.
Proving that spread effects are larger than backwash effects is difficult or impossible.

Question 6

Inequalities

Answer 6

Inequalities are created and social and political hierarchies may work to maintain them.

Question 7

National identity

Answer 7

Mass migration is likely to have a big impact on national identity and sovereignty.
This could lead to discrimination and prejudice that may not be captured by the mode

Question 8

Managing migration

Answer 8

Many governments seek to manage migration, however, advancing technology and an increased level of interconnectedness make it harder to control migration.
Things like remote work in the modern era may not fit well with this model of migration.