On the Notion of Permanent and Temporary Causes. The Legacy of Ricardo

This paper considers the distinction made by David Ricardo between “permanent” and “temporary” causes, which he sometimes refers to also as “stable” and “accidental” causes (see The Works and Correspondence of David Ricardo, vol I: 86, 88, 92; VI: 154), to derive implications useful to distinguish his approach from subsequent developments of the notions of short-period and long- period equilibrium. In particular, I trace the change of focus in the concept of “permanent” forces brought about by Alfred Marshall—from whose insights Alfred Kahn and John Maynard Keynes drew inspiration for their short-period analysis—which paved the way to fundamental changes in the method and theory. It is argued that Ricardo’s distinction maintains a heuristic value, in particular vis-à-vis the distinction between short and long period, which is part of the common language in standard economics.