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Structural change in a Ricardian world economy: The role of extensive rent

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  • Freni, Giuseppe
  • Salvadori, Neri
  • Signorino, Rodolfo

Abstract

We study an implication of the Ricardian theory of differential extensive rent in a free trade regime. To this effect we develop a Ricardian two country two commodity open economy model. We assume that, unlike labour, land is heterogeneous both within and across countries and that the ratio of high to low quality land is different among the trading countries. By means of a numerical example we show that as the process of worldwide capital accumulation (and population growth) proceeds an industrial country may find it convenient to increase its domestic corn production and even reverse completely the pattern of its imports and exports.

Suggested Citation

  • Freni, Giuseppe & Salvadori, Neri & Signorino, Rodolfo, 2019. "Structural change in a Ricardian world economy: The role of extensive rent," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 277-282.
    • Handle: RePEc:eee:streco:v:49:y:2019:i:c:p:277-282
    DOI: 10.1016/j.strueco.2018.10.002
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    References listed on IDEAS

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    More about this item

    Keywords

    Capital accumulation; International trade; Structural change; Ricardian economics; Heckscher-Ohlin model;
    All these keywords.

    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • B27 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - International Trade and Finance

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