The Classics’ View of International Transactions

Classical economists are renowned for their contributions to the various fields of international economics, from foreign trade to international monetary payments. In this regard, Smith and Ricardo were among the greatest authors, not just for their theories of absolute and comparative advantages, but for the effort they made to explain the existence of absolute value when it comes to imports and exports. This chapter unfolds this issue and examines the classical conception of national currencies as a first step towards the contemporary refusal of the physical conception of the monetary means used in international transactions. It is indeed in Ricardo’s monetary writings that a full-fledged investigation of gold flows is to be found. It is from them that new insights into international monetary payments can be sought for.