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Some Notes on Foreign Trade: Ricardo after Sraffa

Author

Listed:
  • Parrinello, Sergio

    (University of Rome “La Sapienza”)

Abstract

Recent years have seen a reinterpretation of Ricardo's numerical example on foreign trade from Sraffa's note (1930), prompting economic historians and theorists to recon-sider the scope of the example. This article seeks to clarify the revised interpretation and explain the common and distinct principles that govern the laws of comparative and absolute advantage. The condition of balanced trade in aggregated value is emphasized relative to the equations of normal prices based on this revisiting. Its special role is shown by the reformulation of Sraffa's price equations for two trading economies with-out international capital movements. It is proved that there is no additional degree of freedom for the choice of exogenous distributive variables if countries move from a state of autarky to one of free trade.

Suggested Citation

  • Parrinello, Sergio, 2025. "Some Notes on Foreign Trade: Ricardo after Sraffa," Centro Sraffa Working Papers CSWP72, Centro di Ricerche e Documentazione "Piero Sraffa".
    • Handle: RePEc:ris:sraffa:0072
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    More about this item

    Keywords

    David Ricardo; comparative advantage; absolute advantage; trade balance; global economy;
    All these keywords.

    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • B17 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - International Trade and Finance
    • F10 - International Economics - - Trade - - - General

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