Some Notes on Foreign Trade: Ricardo after Sraffa

Sergio Parrinello

No CSWP72, Centro Sraffa Working Papers from Centro di Ricerche e Documentazione "Piero Sraffa"

Abstract: Recent years have seen a reinterpretation of Ricardo's numerical example on foreign trade from Sraffa's note (1930), prompting economic historians and theorists to recon-sider the scope of the example. This article seeks to clarify the revised interpretation and explain the common and distinct principles that govern the laws of comparative and absolute advantage. The condition of balanced trade in aggregated value is emphasized relative to the equations of normal prices based on this revisiting. Its special role is shown by the reformulation of Sraffa's price equations for two trading economies with-out international capital movements. It is proved that there is no additional degree of freedom for the choice of exogenous distributive variables if countries move from a state of autarky to one of free trade.

Keywords: David Ricardo; comparative advantage; absolute advantage; trade balance; global economy (search for similar items in EconPapers)
JEL-codes: B12 B17 F10 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2025-05-09
New Economics Papers: this item is included in nep-his, nep-hpe and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:ris:sraffa:0072

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