Question

are Say's law and Keynes' law necessarily mutually exclusive

Answer 1

Say’s law and Keynes’ law are not mutually exclusive because Keynes’ law tends to reflect the short run, while Say’s law reflect the long run.Keynes’ Law states that demand creates its own supply and changes in aggregate demand cause changes in real GDP and employment where as Say’s Law states that supply creates its own demand; changes in aggregate demand have no effect on real gross domestic product or employment, only on the price level.

Say’s Law reveals that while certain markets particularly labor market may be in disequilibrium, it’s not possible that all markets in aggregate can be so – and if, as with unemployed labor, supply exceeds demand, it’s due to policy barriers like minimum wage mandates, regulations and taxes on would-be employers and employees alike.Keynes’s claim that Say’s Law is “equivalent to the proposition that there is no obstacle to full employment [of labor]” is patently false; many (non-macro) factors impede full employment, including above-market wage rates (whether imposed by coercive unions or public policies) and the punitive taxation and/or regulations inflicted on would-be employers and employees