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  5. A Ricardo-Sraffa Paradigm Comparing Gains from Trade in Inputs and Finished Goods

Journal of Economic Literature

ISSN 0022-0515 (Print) | ISSN 2328-8175 (Online)

A Ricardo-Sraffa Paradigm Comparing Gains from Trade in Inputs and Finished Goods

  • Paul A. Samuelson
Journal of Economic Literature
vol. 39, no. 4, December 2001
(pp. 1204–1214)
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Abstract

Here is how the 1817 Ricardo comparative advantage trade benefit analysis has to be modified to take account of post-1960 Sraffian benefits from capital-using technologies. By bringing J. S. Mill's demand model up to date in terms of its implicit geometric-mean money-metric utility, specific measurements for real net national product are calculated to partition sources of welfare gains (from output enhancements and taste-preference accommodations) in scenarios of (1) trade between equals, (2) trade between poor and rich nations, and (3) for biased inventions that enable a poor country to take over production of items in which formerly the rich place enjoyed comparative advantage. History of economic doctrine is mined to advance today's frontier of scientific knowledge--a forward-looking function for "Whig history."

Citation

Samuelson, Paul, A. 2001. "A Ricardo-Sraffa Paradigm Comparing Gains from Trade in Inputs and Finished Goods." Journal of Economic Literature, 39 (4): 1204–1214. DOI: 10.1257/jel.39.4.1204

JEL Classification

  • F11 Neoclassical Models of Trade