Absolute advantages and capital mobility in international trade theory

Enrico Bellino, Saverio M. Fratini

Research output: Contribution to journalArticlepeer-review

Abstract

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.
Original languageEnglish
Pages (from-to)N/A-N/A
Number of pages23
JournalEuropean Journal of the History of Economic Thought
Volume2021
DOIs
Publication statusPublished - 2021

Keywords

  • Capital mobility
  • absolute advantage
  • specialisation

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