A calm investigation into Mr Ricardo's principles of international trade

Gilbert Faccarello
2015 European Journal of the History of Economic Thought  
This paper deals with some difficulties presented by Ricardo's texts on international trade, taking seriously Ricardo's account of the systematic interaction of real and monetary phenomena. After a brief reassessment of the main features of Ricardo's views on foreign trade, some basic questions are examined, concerning the method of analysis and the alleged invalidity of the labour theory of value at the international level. The enquiry goes on to state that, for Ricardo, there are no
more » ... re are no significant differences between domestic and international exchanges, and on this basis, proposes a simple and general rule explaining the flows of trade. The 'principle of comparative advantage' and the 'gains from trade' thus appear as simple unintended consequences of the decisions of agents in free markets. Lastly the characteristics of an international equilibrium and the nature and impact of destabilizing shocks are analysed.
doi:10.1080/09672567.2015.1086011 fatcat:c4cf6x4fszhenciri4gpbjotv4