The Ricardian Dynamics Revisited
AbstractThe 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.
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Bibliographic InfoPaper provided by University of Paris West - Nanterre la Défense, EconomiX in its series EconomiX Working Papers with number 2011-24.
Length: 14 pages
Date of creation: 2011
Date of revision:
Dynamics; Lemke; Linear Complementarity Problem; Rent; Ricardo;
Find related papers by JEL classification:
- B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- D33 - Microeconomics - - Distribution - - - Factor Income Distribution
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-13 (All new papers)
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