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On Gluts, Effective Demand, and the True Meaning of Say's Law


  • Petur O. Jonsson

    (Starr Center for Applied Economics, New York University
    Princeton University)


The meaning of Say's Law may seem an issue of little relevance to economists today. It would seem, on the face of it, of interest only to historians of economics. Whatever Say's Law might mean, the one thing we economists know, or at least think we know, is that it was comprehensively refuted by John Maynard Keynes in his "General Theory of Employment, Interest and Money." Knowing the meaning of this ancient economic doctrine would appear a matter of no contemporary importance. Part of a Symposium entitled, "Say's Law Revisited", this paper argues that the disappearance of the guiding principles underlying Say's Law has grievously damaged our understanding of economic processes. The disappearance of Say's Law from amongst the conceptual tools employed by economists is in fact Keynes's most enduring legacy.

Suggested Citation

  • Petur O. Jonsson, 1997. "On Gluts, Effective Demand, and the True Meaning of Say's Law," Eastern Economic Journal, Eastern Economic Association, vol. 23(2), pages 203-218, Spring.
  • Handle: RePEc:eej:eeconj:v:23:y:1997:i:2:p:203-218

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    Cited by:

    1. Meacci, Ferdinando, 2013. "Say's Law," MPRA Paper 55495, University Library of Munich, Germany, revised Mar 2014.

    More about this item


    Employment; Money;

    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity


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