The Ricardian Dynamics Revisited
Christian Bidard ()
No 2011-24, EconomiX Working Papers from University of Paris Nanterre, EconomiX
The Ricardian dynamics describe the substitution of a new marginal method for an outgoing marginal method when demand increases. The process of extension or intensi cation of cultivation allows for spasmodic changes in prices and rents but is smooth on the physical side. We criticize the notion of extension of cultivation and show the existence of non-Ricardian equilibria, when some good is not produced by a marginal method. The working of the dynamics requires that the incoming method satisfies a productivity condition which is expressed in algebraic terms. A parallel is drawn between Ricardo's views on dynamics and the working of a Lemke algorithm for linear complementarity problems.
Keywords: Dynamics; Lemke; Linear Complementarity Problem; Rent; Ricardo (search for similar items in EconPapers)
JEL-codes: B12 D24 D33 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2011-24
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