If you relieved the excess demand for financial assets, you also cured the excess supply of goods and services (the shortfall of aggregate demand) and the excess supply of labor (mass unemployment).

The implication of this was clear. If you relieved the excess demand for financial assets, you also cured the excess supply of goods and services (the shortfall of aggregate demand) and the excess supply of labor (mass unemployment).

Now, there are many ways to relieve excess demand for financial assets.

Mill saw that excess demand for some particular set of assets in financial markets was mirrored by excess supply of goods and services in product markets, which in turn generated excess supply of workers in labor markets.

When there is no excess demand for cash, there will be no excess supply of the bonds and stocks that underpin and finance the economy s productive capital.

By contrast, a gap between supply and demand when the corresponding excess demand is for financial assets is a recipe for economic meltdown.

This excessive consumption and construction demand led to excess demand for labor, especially in protected sectors like services, thus driving up wage costs.

Fears of excess investment and ghost cities fixate on the supply side, without giving due weight to burgeoning demand.

This signals a remarkable shift in relative demand for high quality and liquid financial assets an extraordinary rise in market wide excess demand for such assets.

First, in a situation of widespread unemployment and excess capacity, short run output is determined primarily by demand, not supply.

A normal gap between supply and demand for some subset of currently produced commodities is not a serious problem, because it is balanced by excess demand for other currently produced commodities.

To some small degree, a change in investor sentiment has induced the rise in excess demand for such assets.

And global financial markets are now telling us that this excess demand for safe, liquid, high quality financial assets has just gotten bigger.

Any lower price in euros would cause excess global demand for oil, while a price above 75 euros would not create enough demand to absorb all of the oil that producers wanted to sell at that price.

Governments absorb the excess of private savings over private investment and re inject it into the global economy, thereby stabilizing aggregate demand and the financial system.

We have seen this principle in action since the early fall of 2007, as growing excess demand for safe, liquid, high quality financial assets has carried with it growing excess supply for the goods and services that are the products of ongoing human labor.

When the excess demand is for liquid assets used as means of payment for money the natural response is to have the central bank buy government bonds for cash, thus increasing the money stock and bringing supply back into balance with demand.

The small excess of quarks over antiquarks led to a small excess of baryons over antibaryons.

If monetary authorities respond appropriately to growing inflationary pressure recognizing that much of it is imported, and not a result of excess domestic demand we may be able to manage our way through it.

Excess of authority or contravention of instructions

China s Excess Capacity Nightmare

A tax on oil, however, does not entail excess burdens. On the contrary, it implies excess benefits .

(d) Net excess (shortfall) of income over expenditure

But, whether caused by an excess of cable television, or an excess of debates themselves, this silly season has seemed especially prolonged, even frightening.

(c) Interest income in excess of the budgetary estimates

The new bank can make a major contribution to the global economy s health by facilitating the transition to new poles of growth and demand, helping to rebalance global savings and investments, and channeling excess liquidity to productive use.

Access is good excess is bad.

The sound principle is excess collateral.

Not surprisingly, a catchphrase in economic policy debates nowadays is secular stagnation, the idea that excess savings chronically dampen demand. The economist Robert Gordon has also argued that the world is low on economically productive ideas.

When there is excess demand for safe, liquid, high quality financial assets, the rule for which economic policy to pursue if, that is, you want to avoid a deeper depression has been well established since 1825.

Stopping the deployment of excess international search and rescue teams

Sustained budget deficits crowd out private investment, push up long term real interest rates, and increase the burden on future taxpayers. But they do not cause inflation unless they lead to excess demand for goods and labor.

Rather, it will increase banks excess reserve balances.

The medicine that has helped, and that remains necessary for the time being, is government debt. Governments absorb the excess of private savings over private investment and re inject it into the global economy, thereby stabilizing aggregate demand and the financial system.

Defective growth models in advanced countries, based on excess credit and domestic aggregate demand (and complicated by structural flaws and limited adjustment mechanisms in Europe), led to instability, a crisis, and a large negative shock to the real economy.

But this excess growth has not been evenly spread.

Despite all this, massive excess bank reserves remain unlent.

Indeed, without adequate regulation, they are prone to excess.

The craving for excess wealth kept you people neglectful .

The craving for excess wealth kept you people neglectful .

As a result, China now faces the problem of short term excess capacity.

Saving. A domestic saving rate in excess of 50 has served China well.

Purchase orders cannot be processed unless they pass through the budget check function, which does not permit expenditure in excess of the project budget for that accounting period, or in excess of cash received.

Incentive structures that encourage excess risk taking remain virtually unchanged.

When there is sufficient excess supply in the economy, promoting supply side productivity is practically useless without efforts to boost demand. That implies that it was not appropriate to focus on growth until the deflation gap narrowed considerably that is, until now.