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Smith's and Ricardo's common logic of trade

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  • Morales Meoqui, Jorge

Abstract

Ricardo essentially adhered to the logic of trade that Smith formulated in the Wealth of Nations. The contrary notion that they had opposing logics of trade is the result of an inaccurate interpretation of Ricardo’s numerical demonstration of the comparative-advantage proposition in chapter seven of the Principles. A deeper understanding of this numerical demonstration also leads to a partial refutation of the familiar contraposition between the comparative-advantage proposition and the absolute cost advantage theory of trade.

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  • Morales Meoqui, Jorge, 2010. "Smith's and Ricardo's common logic of trade," MPRA Paper 27143, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:27143
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    References listed on IDEAS

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    1. Blecker, Robert A, 1997. "The 'Unnatural and Retrograde Order': Adam Smith's Theories of Trade and Development Reconsidered," Economica, London School of Economics and Political Science, vol. 64(255), pages 527-537, August.
    2. Aldrich, John, 2004. "The Discovery of Comparative Advantage," Journal of the History of Economic Thought, Cambridge University Press, vol. 26(03), pages 379-399, September.
    3. Bruce Elmslie, 1994. "The Endogenous Nature of Technological Progress and Transfer in Adam Smith's Thought," History of Political Economy, Duke University Press, vol. 26(4), pages 649-663, Winter.
    4. Jorge Morales Meoqui, 2011. "Comparative Advantage and the Labor Theory of Value," History of Political Economy, Duke University Press, vol. 43(4), pages 743-763, Winter.
    5. Maneschi, Andrea, 2004. "The true meaning of David Ricardo's four magic numbers," Journal of International Economics, Elsevier, vol. 62(2), pages 433-443, March.
    6. Krugman, Paul R, 1993. "The Narrow and Broad Arguments for Free Trade," American Economic Review, American Economic Association, vol. 83(2), pages 362-366, May.
    7. Aykut Kibritçioglu, 2002. "On the Smithian origins of "new" trade and growth theories," Economics Bulletin, AccessEcon, vol. 2(1), pages 1-15.
    8. Myint, Hla, 1977. "Adam Smith's Theory of International Trade in the Perspective of Economic Development," Economica, London School of Economics and Political Science, vol. 44(175), pages 231-248, August.
    9. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
    10. Roy J. Ruffin, 2002. "David Ricardo's Discovery of Comparative Advantage," History of Political Economy, Duke University Press, vol. 34(4), pages 727-748, Winter.
    11. Andrea Maneschi, 2008. "How Would David Ricardo Have Taught The Principle Of Comparative Advantage," Southern Economic Journal, Southern Economic Association, vol. 74(4), pages 1167-1176, April.
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    Cited by:

    1. Jorge Morales Meoqui, 2017. "Ricardo's Numerical Example Versus Ricardian Trade Model: a Comparison of Two Distinct Notions of Comparative Advantage," Economic Thought, World Economics Association, vol. 6(1), pages 35-55, March.
    2. Morales Meoqui, Jorge, 2012. "On the distribution of authorship-merits for the comparative-advantage proposition," MPRA Paper 35905, University Library of Munich, Germany.

    More about this item

    Keywords

    comparative advantage; absolute cost advantage; Ricardian model; international trade theory; free trade;

    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)

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