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Incorporating inventories into supply and demand analysis

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Conclusion

In the microeconomic portions of principles and intermediate macroeconomics, supply and demand analysis is presented as “the truth.” However, the simple Keynesian macroeconomic model virtually ignores market clearing, while the standard microeconomic model of supply and demand assumes perfect market clearing. Since hidden assumptions are a major source of confusion and misunderstanding between economists and the general public, students should be exposed to stock-flow analysis at the intermediate level as a separate or integrated chapter on supply and demand.

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Authors and Affiliations

  1. Pepperdine University, USA

    Robert L. Sexton

  2. University of South Carolina, USA

    Robert W. Clower

  3. University of Colorado, USA

    Philip E. Graves

  4. University of Georgia, USA

    Dwight R. Lee

Authors
  1. Robert L. Sexton
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  2. Robert W. Clower
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  3. Philip E. Graves
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  4. Dwight R. Lee
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Sexton, R.L., Clower, R.W., Graves, P.E. et al. Incorporating inventories into supply and demand analysis. Atlantic Economic Journal 20, 41–45 (1992). https://doi.org/10.1007/BF02300085

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  • DOI: https://doi.org/10.1007/BF02300085

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