[OPE-L:8455] Re: Re: Comparative advantage: Comparative exploitation

From: Alejandro Valle Baeza (avalleb@prodigy.net.mx)
Date: Tue Feb 11 2003 - 15:09:15 EST

Jerry, perhaps this is a response  for your question:
Re: Comparative advantage discussion
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Fri, 13 Nov 1998 13:23:14 -0800 
Jim Devine (jdevine@popmail.lmu.edu)

>Now, if we assume a different theory of money, like that found in
>CAPITAL or in THE GENERAL THEORY, Ricardo's outcome will be
>completely different. As gold flows out of England, bank reserves
>decline, interest rate increase, investment declines and output
>declines. England experiences a chronical trade account deficit. 
>Portugal on the other hand receives gold, which makes bank reserves
>increase, lowering interest rates, increasing investment and output. 
>Portugal experiences a chronical trade account surplus and a capital
>account deficit as capital flows into England attracted by the higher
>interest rate. England, ironically, becomes the chronically indebted
>country and Portugal the chronically creditor country. 
>A different theory of money therefore destroys the happy ending of
>Ricardo's model, and absolute rather than comparative advantage
>determines the direction of trade benefits.

this theory was well-analyzed by Anwar Shaikh, both in SCIENCE & SOCIETY
and in a book edited by Ed Nell titled GROWTH, PROFITS, AND PROPERTY. 

Jim Devine jdevine@popmail.lmu.edu &

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  ----- Original Message ----- 
  From: gerald_a_levy 
  To: ope-l@galaxy.csuchico.edu 
  Sent: Tuesday, February 11, 2003 4:51 AM
  Subject: [OPE-L:8453] Re: Comparative advantage: Comparative exploitation

  Re [8403]:

  There was an interesting comment on  the Kohler paper on the
  Post-Keynesian Thought (PKT) list by Kazuhiro Kurose (from 
  the Graduate School of Economics and Business Administration 
  at Hokkaido University in Sapporo, Japan):

  He claims that if instead of a two-good model, another good
  (such as gold) is adopted as numeraire or if there is a three-
  good model then the principle of comparative advantage lacks
  generality.  Kurose doesn't cite a source, though, for this 
  conclusion.  Does anyone know of such a source by Kurose 
  or anyone else?

  Solidarity, Jerry
    An article by Gernot Kohler:
    "Comparative advantage: Comparative exploitation"

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