David Ricardo developed his economic theory with labor as the sole source of value, which led him to explain land rent based on the differential productivity of land. His framework involves four distinct economic agents: farmers, workers, capitalists, and landowners. Capitalists coordinate available labor with the aim of maximizing profit.

This poster presents an analysis of a dynamic Ricardian economic system that allows for inter-industry wage variations. Building on Pasinetti’s (1974) formalization of a two-industry model—comprising a sector producing wage goods and another producing luxury goods—the analysis introduces the possibility of differing wages between farmers and workers. The study explores the wage structure and price relations that ensure the system’s balance over time. Although the Ricardian model was originally conceived for a closed economy, this work is inspired by the potential for trade between two countries, one specializing in commodities and the other in industrial goods.