Smith's and Ricardo's common logic of trade

Morales Meoqui, Jorge (2010): Smith's and Ricardo's common logic of trade.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: comparative advantage, absolute cost advantage, Ricardian model, international trade theory, free trade
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B12 - Classical (includes Adam Smith)

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