Retrospectives: On the Genius Behind David Ricardo's 1817 Formulation of Comparative Advantage
| Autor: | Daniel M. Bernhofen, John C. Brown |
|---|---|
| Rok vydání: | 2018 |
| Předmět: |
Economics and Econometrics
Generality Mechanical Engineering Interpretation (philosophy) media_common.quotation_subject 05 social sciences Energy Engineering and Power Technology Management Science and Operations Research Neoclassical economics Genius 0502 economics and business Economics Mill Simplicity 050207 economics Paragraph Comparative advantage 050205 econometrics media_common Exposition (narrative) |
| Zdroj: | Journal of Economic Perspectives. 32:227-240 |
| ISSN: | 0895-3309 |
| DOI: | 10.1257/jep.32.4.227 |
| Popis: | Last year marked the 200th anniversary of Ricardo’s famous “four numbers” paragraph on comparative advantage, which is one of the oldest analytical results in economics. Following the lead of James Mill (1821), these four numbers have been interpreted as unit labor coefficients. This interpretation has provided the basis for the development of the ‘Ricardian model’ from John Stuart Mill (1852) to Eaton and Kortum (2002). However, if we accept the labor unit interpretation of these numbers, Ricardo’s exposition in his 1817 Principles of Political Economy and Taxation makes little logical sense. Building on Sraffa’s (1930) interpretation of Ricardo’s numbers as labor embodied in trade, our discussion reveals the amazing simplicity and generality of Ricardo’s comparative advantage formulation and gains-from-trade logic. |
| Databáze: | OpenAIRE |
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