1 Ricardo's theory of capital accumulation has been put into mathematical formulations by various writers; notable examples include Pasinetti, Samuelson and Casarosa. Their common policy has been to construct as simple a system as possible. But actually Ricardo's economy is not a simple macro-model; it is a decentralized economy consisting of an agricultural sector producing corn and industrial sectors manufacturing non-food wage goods and luxuries as well as those to be used for production such as materials, tools and machines. The ratio of fixed (or ‘constant’ in Marx's terminology) to circulating (or ‘variable’) capital may differ from sector to sector; therefore, prices and values generally deviate from each other. Land is diversified in quality; land of grade 1 is higher in productivity than that of grade 2 which is, in turn, higher than that of grade 3, and so on. Consequently, there is no simple aggregate production function for agriculture. Moreover, capitalists or entrepreneurs are concerned with the money wage rate, while workers are interested in corn wages, or real wages in terms of some given consumption bundle of wage goods. Finally, the rate of profit of each sector (agriculture and industry) may generally be unequal, but will converge at a certain uniform rate, where competition prevails.

This is the general character of the economy which Ricardo was concerned with. The task of formulating it mathematically is essentially the same as the one undertaken by Walras, that is, to establish a general equilibrium formulation.