Say’s Law, Savings and Economic Growth Mathematics & Economics Essay

Say’s Law, Savings and Economic Growth
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Say’s Law, Savings and Economic Growth
Economics is a significant field that illustrates the economic problems and how they are addressed. Economists have come up with theories and models to interpret the various economies of different countries. These theories and models have, over time, been corrected by contemporary economists in the attempt to solve the global economic issues. In this regard, various economic determinants are discussed, such as savings as a function of GDP and the likes.
Say’s Law claims that the production of a given product creates demand for another product by providing something of value that can be exchanged for that other product. According to the definition, Keynes implied that production is a source of demand. When a product is created, it affords a market for other products to maximize its value. Also, individuals can only purchase the productions of others with their productions. The value they can purchase equals to the value they can produce (Traité, 1803). This means the more men can purchase, the more they are capable of producing.
Further, Say notes that the Law of Markets meant that an unlimited supply over demand cannot occur. For instance, if there is a surplus of one good, then there must be unmet demand for another. Also, if certain goods remain unsold, it is because other goods are not produced. This Law has been one of the principal doctrines used to support the laissez-faire belief, which notes that a capitalist economy will naturally tend toward full employment and prosperity without government intervention.
Say’s Law has been abandoned in the contemporary economic analysis, and new principles and theories have been given much consideration. However, the Law remains influential upon economists of the classical era. Kates (1997) ascribes such importance to Say’s Law. He views it as the point of origin for Keynes General Theory, which sought to destroy the Law through oversimplification. Say, James, and Mill were preoccupied as the collaborators were with causes of depression, unemployment, and growth. These dictums are forgotten but still retain relevance in the current times.
Economic agents offer goods and services for sale so they can spend the money they expect to obtain. In this regard, the fact that a quantity of goods and services is obtainable for sale is evidence of equal quantity and demand. Say’s argument was that money is the only medium where people pay for goods and services with other goods and services as indicated in supply creates demand principle, though not in the Say’s Law. Mill and other political and economic writers held various opinions on Say’s Law. They questioned the philosophy about production, supply, and demand.
He questioned the doctrine that general gluts cannot occur and argued that there is unsatisfactory demand for all non-monetary items and excess demand for money. Whenever there is anxiety to sell and a general disinclination to buy, goods remain for a long time unsold, while those that find an immediate market do so at lower prices. There could be commodities generally not in consequence of overprodu...