The Law of Comparative Cost

No method of economic calculation is possible other than one based on money prices as determined by the market. If we do not want to deal with the law of comparative cost under the simplified assumptions applied by ricardo, we must openly employ money calculation. We realize that with regard to the determination of value and of prices, there is no difference between domestic and foreign trade. What makes people distinguish between the home market and markets abroad is only a difference in the data. That is, varying institutional conditions. Restricting the mobility of factors of production and of products. The meaning of the simple assumptions underlying the law of Comparative Cost is not precisely the same for the modern economists as it was for the classical