On “effectual demand” and the “extent of the market” in Adam Smith and David Ricardo

Thomas, Alex M. (2020) On “effectual demand” and the “extent of the market” in Adam Smith and David Ricardo. European Journal of the History of Economic Thought, 28 (3). pp. 305-323. ISSN 0967-2567

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This paper revisits the question of demand in the works of Adam Smith and David Ricardo by adopting a novel approach: the joint examination of the concepts of “effectual demand” and the “extent of the market.” The discussion on “effectual demand” highlights its social nature and finds that in a multi-commodity framework, the vector of commodity supplies adapts to the vector of effectual demands. Subsequently, the “extent of the market” is seen to play a distinct role in determining economic growth as a demand-side determinant alongside the supply-side determinants of net saving and technological progress. The connections between the “extent of the market” and “effectual demand” are also explored in this paper. The findings point to a more important analytical role for demand in both Smith and Ricardo than has hitherto been highlighted.

Item Type: Article
Authors: Thomas, Alex M.
Uncontrolled Keywords: Effectual demand, classical economics, extent of the market, social tastes, economic growth
Subjects: Social sciences > Economics
Divisions: Azim Premji University > School of Arts and Sciences
Full Text Status: Restricted
Related URLs:
URI: http://publications.azimpremjiuniversity.edu.in/id/eprint/2427
Publisher URL: https://doi.org/10.1080/09672567.2020.1817120

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