Critique of Say

Critique of Say - Critique of Says Law: Keynes criticism of...

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Critique of Say’s Law : Keynes’ criticism of the classical theory in general and Say’s Law in particular is the first step in the direction of the new theory. Say’s Law of the markets is a truism only under barter economic system. In that case whatever goods are produced are either sold in the market or are utilized for self-consumption. Hence supply and demand are always equated . There cannot be a general surplus or glut of the goods. Though this works well under barter conditions it is no more true in a modern economy where almost every transaction is carried out with money in the form of currency or credit . In such an economy buyers and producers or even sellers are not directly collecting together to carry out the exchange activity but messages are sent through the medium of money. The classical approach is essentially partial and a microeconomic piece of analysis. It looks at the problem of employment and unemployment from the perspective of an individual producer and employer
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Critique of Say - Critique of Says Law: Keynes criticism of...

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