Robert Torrens on Say’s Law and the General Glut

Author/s Rogério Arthmar, Taro Hisamatsu
Publishing Year 2021 Issue 2021/1 Language English
Pages 23 P. 83-105 File size 307 KB
DOI 10.3280/SPE2021-001004
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This paper analyzes how Robert Torrens’s system of prices is applied to the aggregate economy. His personal interpretation of Say’s Law is articulated with a numerical illustration and the Hawkins-Simon conditions to exemplify how the correct supply of the ingredients of capital is presented as a necessary condition for the full clearing of markets. Next, the possible causes of a shortage in effectual demand are discussed. The quantitative illustrations developed by Torrens are carefully reviewed to show how the monetary factors play a crucial role during the general glut, as well as the appropriate policy measures to stabilise the economy. The final comments reflect on the originality of Torrens’s theoretical work.

Keywords: Torrens, classical economics, Say’s law, effectual demand, general glut

Jel codes: B12, B16, B31, B51

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Rogério Arthmar, Taro Hisamatsu, Robert Torrens on Say’s Law and the General Glut in "HISTORY OF ECONOMIC THOUGHT AND POLICY" 1/2021, pp 83-105, DOI: 10.3280/SPE2021-001004