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- Q626021 abstract "Say's law, or the law of markets, in classical economics, states that aggregate production necessarily creates an equal quantity of aggregate demand. The French economist Jean-Baptiste Say (1767–1832) introduced the idea in 1803, in his principal work, A Treatise on Political Economy (Traité d'économie politique):A product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value.and As each of us can only purchase the productions of others with his own productions – as the value we can buy is equal to the value we can produce, the more men can produce, the more they will purchase.Say further argued that the law of markets implies that a general glut (the term used in Say's time for a widespread excess of supply over demand) cannot occur. If there is a surplus of one good, there must be unmet demand for another: "If certain goods remain unsold, it is because other goods are not produced." Say's law has been one of the principal doctrines used to support the laissez-faire belief that a capitalist economy will naturally tend toward full employment and prosperity without government intervention.Over the years, at least two objections to Say's law have been raised: General gluts do occur, particularly during recessions and depressions. Economic agents may collectively choose to increase the amount of money they hold, thereby reducing demand but not supply.Say's law was generally accepted throughout the 19th century, though modified to incorporate the idea of a "boom-and-bust" cycle. During the worldwide Great Depression of the 1930s, the theories of Keynesian economics disputed Say's conclusions.Scholars disagree on the question of whether it was Say who first stated the principle, but by convention, Say's law has been another name for the law of markets ever since John Maynard Keynes used the term in the 1930s.".
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- Q626021 comment "Say's law, or the law of markets, in classical economics, states that aggregate production necessarily creates an equal quantity of aggregate demand.".
- Q626021 label "Say's law".