Who said supply creates demand

If I may also put it in abstract terms also then it seems to hold valid. For eg - The more we love, the more generous we are, the more gratitude we supply from our own side the more we find we are capable to render.

In my opinion only by consistently supplying goodwill or any good thing can we hope to increase the substantive over superficial in our individual lives and in the collective dream called culture. Please log in or register to add a comment. Please log in or register to answer this question. I recommend you to read my last work, which I uploaded here. Supply creates its own demand. That's right. But what Keynes explains is that because of propensity to consume and other factors, demand created by supply is not enough to consume all output.

So companies tend to halt production and cut prices. Both theorical approaches are valid. Supply creates demand and demand support supply. Kind regards. I have been reflecting on this topic for a couple of days now and it seems to me that supply follows demand. It is worth noting that my idea only holds if we make no distinction between necessity and demand.

Let me illustrate my theory: Individuals and societies always have natural needs. When the producer has put the finishing hand to his product, he is most anxious to sell it immediately, lest its value should diminish in his hands. Nor is he less anxious to dispose of the money he may get for it; for the value of money is also perishable.

But the only way of getting rid of money is in the purchase of some product or other. From: Say's law in A Dictionary of Economics ». Subjects: Social sciences — Economics. View all related items in Oxford Reference ». Search for: 'Say's law' in Oxford Reference ». All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single entry from a reference work in OR for personal use for details see Privacy Policy and Legal Notice. Say's recognition of production and exchange as processes occurring over time, focus on different types of goods as opposed to aggregates, emphasis on the role of the entrepreneur to coordinate markets, and conclusion that persistent downturns in economic activity are usually the result of government intervention are all particularly consistent with Austrian theory.

Keynes rewrote Say's Law, then argued against his own new version to develop his macroeconomic theories. Keynes reinterpreted Say's Law as a statement about macroeconomic aggregate production and spending, in disregard of Say's clear and consistent emphasis on the production and exchange of various particular goods against one another. Keynes then concluded that the Great Depression appeared to overturn Say's Law. Keynes' revision of Say's Law led him to argue that an overall glut of production and deficiency of demand had occurred and that economies could experience crises that market forces could not correct.

Keynesian economics argues for economic policy prescriptions that are directly contrary to the implications of Say's Law. Keynesians recommend that governments should intervene to stimulate demand—through expansionary fiscal policy and money printing—because people hoard cash in hard times and during liquidity traps.

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