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Globalization of Production and Absolute Advantage in a Classical Approach

Siqueira Machado, P. ORCID: 0000-0002-5613-728X (2023). Globalization of Production and Absolute Advantage in a Classical Approach. Review of Political Economy, pp. 1-19. doi: 10.1080/09538259.2023.2265102


Trade in intermediate goods has grown in importance over the past decades. However, there is an apparent inability of trade theory to deal with it. A suitable place to look for an explanation is the classical theory, which puts emphasis in the circular aspect of production. This paper uses a classical-production framework, based on Sraffa’s contributions, to investigate the globalization of production. It presents a novel closure to the system of international prices based on given wage disparities. This novel closure emphasizes the relevance of absolute cost advantages in the determination of international prices and the geographical distribution of production.

Publication Type: Article
Additional Information: © 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License (, which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent.
Publisher Keywords: International trade, classical political economy, absolute advantage
Subjects: H Social Sciences > HB Economic Theory
J Political Science > JA Political science (General)
Departments: School of Policy & Global Affairs > International Politics
SWORD Depositor:
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