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Exclusion in “Ricardian” Trade Models

Author

Listed:
  • Crespo, Eduardo

    (Institute of Economics, Federal University of Rio de Janeiro)

  • Dvoskin, Ariel

    (CONICET - IDAES National University of San Martín)

  • Ianni, Guido

    (Roma Tre University)

Abstract

The paper discusses the following result of the so-called ‘Ricardian’ models of international trade: the impossibility of exclusion from trade. We show that this result holds due to the very restrictive assumptions behind these models: (i) commodities are produced by unassisted labour alone under (ii) complete factor immobility. The moment these assumptions are relaxed, the likelihood of exclusion can no longer be neglected. The reason is the following: even if there were no limits to the fall in the rate of domestic real wages, production costs would reach a positive lower bound due to the presence of imported capital goods. Exclusion is therefore the result of this lower bound being higher than the prevailing international price, for both capital and consumption-goods sectors

Suggested Citation

  • Crespo, Eduardo & Dvoskin, Ariel & Ianni, Guido, 2019. "Exclusion in “Ricardian” Trade Models," Centro Sraffa Working Papers CSWP39, Centro di Ricerche e Documentazione "Piero Sraffa".
    • Handle: RePEc:ris:sraffa:0039
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    Cited by:

    1. Dvoskin, Ariel & Ianni, Guido, 2021. "Produced means of production and the chain of comparative advantages," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 635-647.
    2. Ariel Dvoskin & Gabriel Brondino, 2022. "An appraisal of alternative Ricardian trade models," BCRA Working Paper Series 2022104, Central Bank of Argentina, Economic Research Department.
    3. Ariel Dvoskin & Guido Ianni, 2020. "A Critical Assessment of Comparative Advantages," Department of Economics University of Siena 825, Department of Economics, University of Siena.

    More about this item

    Keywords

    absolute advantage; comparative advantage; exclusion from trade; pattern of specialization; Ricardian models of trade;
    All these keywords.

    JEL classification:

    • B27 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - International Trade and Finance
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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