The Classical Legacy

Leonard Gomes
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Leonard Gomes: Middlesex Polytechnic

Chapter 1 in Neoclassical International Economics, 1990, pp 1-9 from Palgrave Macmillan

Abstract: Abstract The early neoclassical economists were heirs to a rich legacy of classical writings: (1) The Ricardo-Torrens principle of comparative advantage; (2) John Stuart Mill’s theory of international values in terms of reciprocal demand and supply analysis, i.e. the ‘equilibrium’ theory of trade. Complementing these essentially barter relationships, there was (3) a theory of balance-of-payments adjustment mechanism, i.e. Hume’s price-specie flow mechanism and various statements of it by Ricardo, Thornton and Mill.1 These three analytical building blocks constitute the core of present-day orthodox international economics. As recently as 1974, the late Joan Robinson lamented the fact that ‘the development of the theory [of international trade] to this day runs in the narrow channel that was appropriate to Ricardo’s demonstration of the principle of comparative advantage.’.2

Keywords: Free Trade; Comparative Advantage; Trade Theory; Commercial Policy; Monetary Theory (search for similar items in EconPapers)
Date: 1990
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-37155-2_1

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DOI: 10.1057/9780230371552_1

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