Retrospectives

On the Genius Behind David Ricardo's 1817 Formulation of Comparative Advantage

Datos Bibliográficos

ID14855152
AutoresDaniel M Bernhofen (0000-0002-3040-9590, Daniel M. Bernhofen is Professor of International Relations, School of International Service, American University, Washington, DC. Bernhofen is the corresponding author at), John C Brown (John C. Brown is Professor of Economics, Clark University Worcester, Massachusetts.)
Año2018
Volumen32
Número4
Páginas227-240
Fecha de publicación2018-11-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaThe Journal of Economic Perspectives (JOURNAL)
Identificadores de la revistaISSN: 0895-3309 • E-ISSN: 1944-7965
EditorialAmerican Economic Association (PUBLISHER • US)
DOI10.1257/jep.32.4.227
IdiomaEN
Citas recibidas3
Referencias citadas13

Last year marked the 200th anniversary of Ricardo’s famous “four numbers” paragraph on comparative advantage, which is one of the oldest analytical results in economics. Following the lead of James Mill (1821), these four numbers have been interpreted as unit labor coefficients. This interpretation has provided the basis for the development of the ‘Ricardian model’ from John Stuart Mill (1852) to Eaton and Kortum (2002). However, if we accept the labor unit interpretation of these numbers, Ricardo’s exposition in his 1817 Principles of Political Economy and Taxation makes little logical sense. Building on Sraffa’s (1930) interpretation of Ricardo’s numbers as labor embodied in trade, our discussion reveals the amazing simplicity and generality of Ricardo’s comparative advantage formulation and gains-from-trade logic

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