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Refutations of Say’s Law and Dynamics of a Monetary Economy of Production

Author

Listed:
  • Edouard Cottin-Euziol

    (LC2S - Laboratoire caribéen de sciences sociales - CNRS - Centre National de la Recherche Scientifique - UA - Université des Antilles)

  • Nicolas Piluso

    (CERTOP - Centre d'Etude et de Recherche Travail Organisation Pouvoir - UT2J - Université Toulouse - Jean Jaurès - UT - Université de Toulouse - UT3 - Université Toulouse III - Paul Sabatier - UT - Université de Toulouse - CNRS - Centre National de la Recherche Scientifique, UT3 - Université Toulouse III - Paul Sabatier - UT - Université de Toulouse)

Abstract

In a monetary economy of production, Say's law is invalid for several reasons. Based on some refutations, it is possible to state that revenues generated by the production process are structurally lower than the supply price of production, which means that firms create insufficient purchasing power to buy what they produce. Herein, we study the dynamics of such an economy and obtain two main results. First, the long-term debt level of that economy must increase during a growth phase to enable demand to grow at the same pace as supply. Second, due to the repayment of this debt, the gap between supply and net revenues generated by the production process widens along a growth phase.

Suggested Citation

  • Edouard Cottin-Euziol & Nicolas Piluso, 2023. "Refutations of Say’s Law and Dynamics of a Monetary Economy of Production," Post-Print hal-04099488, HAL.
    • Handle: RePEc:hal:journl:hal-04099488
    DOI: 10.1177/04866134231179758
    as

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