GRAHAM’S THEORY OF INTERNATIONAL VALUES REVISITED: A RICARDIAN TRADE MODEL WITH LINK COMMODITIES

Frank D. Graham (1890–1949) presented an innovative multi-country, multi-commodity trade model that attached great importance to link commodities and quantity adjustments, not perfect specializations price adjustments as emphasized by John Stuart Mill Alfred Marshall. However, due some shortcomings, this was sufficiently understood has been forgotten. This study reconstructs Graham’s theory of international values rectifying the shortcomings. Through reconstruction, following is clarified. First, in models, existence general seldom appear; therefore, are normally performed face demand shifts. Second, notwithstanding unchanging sectoral productivity at a national level, wage rates can vary greatly according patterns division labor. Third, while domestic relative rate increases with increase home country’s commodities, it does produced only country.