Ricardo's macroeconomics : money, trade cycles, and growth /
Timothy Davis
- Cambridge : Cambridge University Press, 2005
- xii, 316p. bibliog. 22cm.
The outline of modern macroeconomics took shape in Britain in the early nineteenth century. Britain was challenged by monetary inflation, industrial unemployment, and the loss of jobs abroad. Ricardo pointed the way forward. As a financier and Member of Parliament, he was well versed in politics and commercial affairs. His expertise is seen in the practicality of his proposals, including the resumption of the gold standard, which was essential given the destabilizing policy of the Bank of England. Ricardo's expertise appears also in his debate with T. R. Malthus about whether an industrial economy can suffer a prolonged depression. Say's law of markets and the quantity theory of money figure prominently in his works, but not in an extreme form. He was instead a subtle theorist, recognizing, among other phenomena, the non-neutrality of money, trade depressions, and unemployment.