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A Ricardo-Sraffa Paradigm Comparing Gains from Trade in Inputs and Finished Goods

Listed author(s):
  • Paul A. Samuelson

Here is how the 1817 Ricardo comparative advantage trade benefit analysis has to be modified to take account of post-1960 Sraffian benefits from capital-using technologies. By bringing J. S. Mill's demand model up to date in terms of its implicit geometric-mean money-metric utility, specific measurements for real net national product are calculated to partition sources of welfare gains (from output enhancements and taste-preference accommodations) in scenarios of (1) trade between equals, (2) trade between poor and rich nations, and (3) for biased inventions that enable a poor country to take over production of items in which formerly the rich place enjoyed comparative advantage. History of economic doctrine is mined to advance today's frontier of scientific knowledge--a forward-looking function for "Whig history."

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Article provided by American Economic Association in its journal Journal of Economic Literature.

Volume (Year): 39 (2001)
Issue (Month): 4 (December)
Pages: 1204-1214

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Handle: RePEc:aea:jeclit:v:39:y:2001:i:4:p:1204-1214
Note: DOI: 10.1257/jel.39.4.1204
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