Comments on: Proverb Tuesday: does supply create its own demand? http://stevenmoody.com/2009/08/11/proverb-tuesday-does-supply-create-its-own-demand/?utm_source=rss&utm_medium=rss&utm_campaign=proverb-tuesday-does-supply-create-its-own-demand Applying CommonSense 1.0 to Web 2.0 Tue, 11 Aug 2009 18:09:58 -0700 http://wordpress.org/?v=2.8.3 hourly 1 By: Charles Mutunga http://stevenmoody.com/2009/08/11/proverb-tuesday-does-supply-create-its-own-demand/comment-page-1/#comment-5 Charles Mutunga Tue, 11 Aug 2009 18:09:58 +0000 http://stevenmoody.com/blog/?p=104#comment-5 Say was a great economist but I tend to side with the Keynesians and argue that demamnd plays a more crucial role than supply in a modern monetary economy. In the Wii example for instance, if people did not actually want (demand) it (i.e the wii), I doubt that the product would have been successfull. The manufacturers must done some sort of market research and correctly determined that there was a need for the product. I just do not see how one can manufacture a product and simply expect people to embrace it. Also, the main course inflation in an economy is due to an excessive money supply in the system. If the demand for money is met with an equal money supply, then inflation would not happen in the first place. Unless you still live in the Middle Ages where the barter system ruled, then supply does not create demand. Say was a great economist but I tend to side with the Keynesians and argue that demamnd plays a more crucial role than supply in a modern monetary economy. In the Wii example for instance, if people did not actually want (demand) it (i.e the wii), I doubt that the product would have been successfull. The manufacturers must done some sort of market research and correctly determined that there was a need for the product.

I just do not see how one can manufacture a product and simply expect people to embrace it. Also, the main course inflation in an economy is due to an excessive money supply in the system. If the demand for money is met with an equal money supply, then inflation would not happen in the first place. Unless you still live in the Middle Ages where the barter system ruled, then supply does not create demand.

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