A Note on the Role of Aggregate Demand in Ricardo

Thomas, Alex M. (2019) A Note on the Role of Aggregate Demand in Ricardo. History of Economics Review.

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Abstract

In the voluminous secondary literature on Ricardo’s political economy, there is little recognition of a role for aggregate demand. Through a close reading of Ricardo’s Principles of Political Economy and Notes on Malthus, this paper argues that aggregate demand—defined as aggregate investment and consumption—does matter in Ricardo’s framework, notwithstanding his special assumption that saving equals investment. After presenting Ricardo’s methodology through the distinct determinants of ‘value and riches’, the motives to accumulate and produce, and the saving-is-investment assumption, the scope of Say’s Law in Ricardo is examined. Subsequently, through an analysis of his commentary on gluts and the ‘extension of the market’, the paper outlines the theoretical possibility of aggregate demand deficiency in Ricardo’s work.

Item Type:	Article
Authors:	Thomas, Alex M.
Document Language:	Language English
Uncontrolled Keywords:	Ricardo, aggregate demand, classical economics, Say’s Law
Subjects:	Social sciences > Economics
Divisions:	Azim Premji University - Bengaluru > School of Arts and Sciences
Full Text Status:	Restricted
Related URLs:	Google Scholar
URI:	http://publications.azimpremjiuniversity.edu.in/id/eprint/1954
Publisher URL:	https://dx.doi.org/10.1080/10370196.2019.1575175

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