On Some “New” Interpretations of Ricardo’s Principle of Comparative Advantages

CSWP 60 (December 2022)

Author Sergio Parrinello

Keywords David Ricardo; Comparative advantage; Gains from trade

JEL B12; B17; F10

Different theories of international trade have originated from Chapter VII “On Foreign Trade” of Ricardo’s Principles and particularly from the interpretation of his numerical example of the gains from trade. In this paper a relatively new interpretation of such example and the resulting implications will be assessed in the light of Sraffa’s writings (1930, 1951) and of the so-called Neo-Ricardian approach applied to the theory of foreign trade. In particular, it will be reconsidered: i) the analogy between the choice of international specialization and the choice of techniques; ii) the conditions under which absolute cost advantages may prevail over comparative advantages and affect the pattern of international trade and the delocalization of the national industries.

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