Capital mobility has the potential of undermining the validity of Ricardo’s theory of comparative advantage. Within this context, the tendency towards a uniform rate of profit makes absolute costs relevant for the analysis of specialisation patterns. A historical and analytical reconstruction is resented of a few significant contributions addressing this point, with a particular focus on the possibility of exclusion from trade and production “desertification” caused by a country’s low profitability of capital. A generalisation of a result obtained by Parrinello is provided.
|Number of pages||23|
|Journal||European Journal of the History of Economic Thought|
|Publication status||Published - 2021|
- Capital mobility
- absolute advantage