Economic growth and structural transformation in Ricardo : the role of demand forces in the process of industrialization

The role of demand in the Ricardian system has been the subject of a great controversy. Initially, the idea that demand does not play any significant part in Ricardo's analysis predominated in the literature, especially with the rise and development of the Sraffian school. A reaction to this line of interpretation has already appeared in the literature, in particular, in the works of Samuel Hollander. This controversy, however, has been basically confined to the discussion of price determination and the mechanism of resource allocation. It is in the context of that debate that the present study of the role of demand in Ricardo within the broader perspective of accumulation and economic development is set. Ricardo's concern with the feed-back effect between the process of growth and changes in the structure of consumption of society is illustrated, as also its importance as a necessary condition for the development of the industrial sector.