Demand and supply

In a monetary economy, supplies of goods and services are derived from demand. Suppliers aim to manage demand (through pricing, advertising, offers, availability) but in a free market, consumer & government demand drives the economic system. Supply equals demand in accounting terms, but Say’s Law (supply creates its own demand) does not hold. However, supply must necessarily precede demand in time, so that suppliers must anticipate and envision demand in a trial & error process having profound implications for economics. The supply-demand curves in elementary neoclassical economics are highly misleading and wrong

Relevant papers:

Barker (2011)

References:

Barker, Terry (2011) ‘Towards a ‘new economics’: values, resources, money, markets, growth and policy’, chapter 2, pp. 39-76 in Philip Arestis and Malcolm Sawyer (eds) New Economics as Mainstream Economics, Palgrave Macmillan.

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