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From endogenous growth to stationary state: The world economy in the mathematical formulation of the Ricardian system

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  • Neri Salvadori
  • Rodolfo Signorino

Abstract

We analyse international trade in a Pasinetti–Ricardo growth model in the world economy scenario in which several small trading countries coexist and international commodity prices are determined by the interplay of supply and demand amongst them. We demonstrate that all the trading countries eventually reach the stationary state, though this process is not monotonic and the dynamics of capital and population may actually push some countries towards the stationary state and others away from it. We also use our model to assess an argument which Malthus employed in the second edition of An Essay on the Principle of Population (1803) to support a policy of agricultural protectionism.

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  • Neri Salvadori & Rodolfo Signorino, 2017. "From endogenous growth to stationary state: The world economy in the mathematical formulation of the Ricardian system," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 24(3), pages 507-527, May.
    • Handle: RePEc:taf:eujhet:v:24:y:2017:i:3:p:507-527
    DOI: 10.1080/09672567.2016.1186204
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    References listed on IDEAS

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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Nicholas Kaldor, 1955. "Alternative Theories of Distribution," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 23(2), pages 83-100.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    4. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 500-521, June.
    5. Neri Salvadori (ed.), 2003. "Old and New Growth Theories," Books, Edward Elgar Publishing, number 2806, March.
    6. D'Alessandro, Simone & Salvadori, Neri, 2008. "Pasinetti versus Rebelo: Two different models or just one?," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 547-554, March.
    7. Neri Salvadori (ed.), 2003. "The Theory of Economic Growth," Books, Edward Elgar Publishing, number 2741, March.
    8. Luigi L. Pasinetti, 1960. "A Mathematical Formulation of the Ricardian System," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 27(2), pages 78-98.
    9. Neri Salvadori & Carlo Panico (ed.), 2006. "Classical, Neoclassical and Keynesian Views on Growth and Distribution," Books, Edward Elgar Publishing, number 3797, March.
    10. Neri Salvadori & Rodolfo Signorino, 2015. "Defense versus Opulence? An Appraisal of the Malthus-Ricardo 1815 Controversy on the Corn Laws," History of Political Economy, Duke University Press, vol. 47(1), pages 151-184, March.
    11. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    1. Freni, Giuseppe & Salvadori, Neri & Signorino, Rodolfo, 2019. "Structural change in a Ricardian world economy: The role of extensive rent," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 277-282.

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    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • F10 - International Economics - - Trade - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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