Money, Banks and Finance in Economic Thought

Ricardo on Machinery: An Analysis of Ricardo's examples

Freni Giuseppe, University of Naples Parthenope
Salvadori Neri, University of Pisa

The examples that are reported in the famous chapter "On Machinery" added by Ricardo in the third edition of his Principles are reconstructed and analyzed. Two sets of assumptions that rationalize the examples presented by Ricardo are identified: a) the innovation concerns an agricultural commodity and does affect neither which land is marginal nor the technology applied on the marginal land; b) the innovation concerns a non-basic commodity. Ricardo was aware of these two facts and he seems to have used them respectively in the first and second of his examples.

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Keywords: Ricardo, Machinery, Implicit assumptions

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