Chapter 6 Structural Changes and Development

Adam Smith was interested in the conditions under which the economic growth of nations can be achieved. He was mainly concerned with how division of labor and extension of markets may favor the increase of national wealth. His economic theory is not so rich in addressing issues related to income distribution. In contrast, Ricardo was concerned with the relations between prices and income distribution. He studied income distribution to explain how a change in this distribution could hinder or favor accumulation. His On the Principles of Political Economy and Taxation of 1817 was considered the most valuable contribution made to economic science since that by Adam Smith.

Introducing the law of diminishing ...

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