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

Edouard Cottin-Euziol () and Nicolas Piluso ()
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Edouard Cottin-Euziol: LC2S - Laboratoire caribéen de sciences sociales - CNRS - Centre National de la Recherche Scientifique - UA - Université des Antilles

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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.

Keywords: Say’s law; monetary economy of production; growth phase; bank credit; bank debt; monetary circuit theory (search for similar items in EconPapers)
Date: 2024-03
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Published in Review of Radical Political Economics, 2024, 56 (1), pp.101-115. ⟨10.1177/04866134231179758⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04099488

DOI: 10.1177/04866134231179758

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