More on Say's Law
Preparing to teach macroeconomics today, I read the following: "It is worthwhile to remark that 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. When the producer has put the finishing hand to his product, he is most anxious to sell it immediately, lest its value should diminish in his hands. Nor is he less anxious to dispose of the money he may get for it; for the value of money is also perishable." -- J. B. Say Two things came to mind: 1) "affords a market for other products to the full extent of its own value." But the point that Malthus and Sismondi were making was that the producer might have been mistaken about what the "full extent" of the market value of his product would be, so that he could only sell at a loss... at which point he might decide to sit on the product and hope for a price increase. This can be translated as: Say's Law holds under conditio...