So I have a race of Gnomes, (think smaller, less hairy dwarfs) that live inside a hollow mountain in the center of a desert on my fictional planet. This planet has civilization but it is mostly confined to a few cities with very little in between. Harsh weather, brutal wildlife, and even worse raiders make travel dangerous and air travel nigh-impossible. Three large continents dominate the planet, with the Gnomes’ city sharing one continent with only one other large city, which happens to be the largest single human city on the planet and a coastal city as well.
The Gnomes are very advanced, and create some of the best technology and highest quality materials on the planet. As such, they enjoy a high standard of living and great wealth. Their mountain is the only major source of Gnomish civilization, and their total population is relatively low, maybe just a few million. They have indoor farms, and access to a large river, but they are still mostly confined to their mountain.
Here is my question. How will this city of Gnomes affect the world economy? Specifically, would this situation result in the Gnomes being able to do what they want without fear of reprisal due to the fact that they are so prosperous? There is a network of 7-10 massive human cities to trade with, along with 4 non-human cities and a non-human group that is mostly nomadic tribes. All these groups have access to similar technology levels, all of which are slightly below the Gnomes. I had already imagined that the human city that shares the continent with the Gnome city would have grown the largest and most powerful due to its constant trade with the Gnomes, and because it is a port city, which the Gnomes do not have. The technology level of the world is close to where we are. Some technologies are more advanced, but some are non existent such as internet and most air travel.