<p>The Law of Supply (LOS) and the Law of Demand (LOD) are the two most successful economic predictions. I know you asked for one example, but these concepts run hand in hand, and are often thought of as one general concept. One of the earliest mentions of ideas like LOS and LOD was in 1691 by the philosopher John Locke in his publication "Some Considerations on the Consequences of the Lowering of Interest and the Raising of the Value of Money." However it was noticed well before then (it just wasn't in a published work). </p>

<p>The LOD says that if the price of a good decreases, the quantity demanded for that good will increase (as long as consumers are able to purchase more). This prediction has been realized more times than we can count. There is really only one exception to the LOD, and that is giffen goods. However, seeing that there are only a handful of cases where a giffen good has been observed, they make up a minute fraction of the total number of observations.</p>

<p>The LOS says that if the price of a good increases, the quantity supplied for that good will increase (as long as firms are able to produce more). Again, this prediction has been realized more times than we can count. I cannot think of any exceptions to the LOS.</p>

<p>These two laws are the most successful predictions in economics (in my opinion) because they are the basis for all of economics. If these two laws were not true, most of economics wouldn't be as it is today.</p>

CC BY-SA 3.0
2016-06-09T15:22:01.860Z
Actually, the entire discipline of Keynesianism was created to develop models where those predictions don't hold. Do you have  a more specific example?
D J Sims
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2016-06-09T15:26:01.823Z
@DJSims it seems as you were the one who made the claim, the burden of proof or example falls on you. I'm not quite sure to what models you are referring when you make your claim. Where in Keynesianism is the assumption that the law of supply and the law of demand do not hold? As far as I know, in Keynesianism, we still have a downward sloping demand curve and an upward sloping supply curve.
DornerA
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2016-06-09T15:40:08.583Z
@DJSims Classical economics vs. Keynesian economics has absolutely nothing to do with the validity of LOD or LOS, so what is the point you are trying to make here?
DornerA
CC BY-SA 3.0
2016-06-09T15:43:55.583Z
@DJSims Ok, if that is the point you are trying to make, then try to come up with a reason as to why it does not make sense that actually pertains to the answer I have provided.
DornerA
CC BY-SA 3.0
2016-06-09T16:01:05.910Z
I did though. The prediction made by the LOD or LOS is exactly the same as any other predictive proposition in economics: If x then y. In my example (LOS) it is: If the price of a good increases, then the quantity supplied of that good will increase. In another example it could be: If the U.S. debt gets to be $20 trillion, then the U.S. will default on it. These two are both economic propositions that predict an outcome given an event. I can list a specific example if you would like. If the price of a desk increases, the firm that makes the desk will produce more desks.
DornerA
CC BY-SA 3.0
2016-06-09T16:07:43.600Z
Yes it has. Any prediction is tested on whether it occurs or not. Both of these, as I stated in my answer, have been proven correct countless times.
DornerA
CC BY-SA 3.0
2016-06-09T14:58:35.713Z
2016-06-09T14:58:35.713Z
DornerA
<p>The question above is closed and unanswered. Stop dodging the question. </p>

<p>I am asking for one example.</p>

<p>Successful defined as:</p>

<ol>
<li>Has been consistently correct for the longest number of years</li>
<li>Has been specifically mentioned in the economic literature as an example of a successful economic prediction </li>
</ol>

CC BY-SA 3.0
2016-06-09T12:44:40.983Z
I removed the bits that explained how awesome your question was as they have nothing to do with the economic content of the question. Feel free to roll back the edit. I think you should also remove the word "most" as it makes the question opinion based.
Giskard
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2016-06-09T12:59:21.567Z
I'd say the laws of demand and supply fit these criteria and are pretty cool.
DornerA
CC BY-SA 3.0
2016-06-09T13:43:16.910Z
I think you'll have to narrow it down a bit. Maybe pick a specific economic field and more criteria, Otherwise there are countless possible answers to your question.
BB King
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2016-06-09T15:22:39.193Z
That doesn't matter bb. I am only asking for one.
D J Sims
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2016-06-09T16:44:05.047Z
Possible duplicate of [Has economics ever provided useful predictions?](http://economics.stackexchange.com/questions/12265/has-economics-ever-provided-useful-predictions)
Kitsune Cavalry
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2016-06-09T16:47:14.547Z
That question was closed unanswered for no reason. Stop dodging the question.
D J Sims
CC BY-SA 3.0
2016-06-09T17:37:55.570Z
DJ Sims, the way I understood it is that you're not asking for one, nut rather for THE one. The latter is a much harder question, which is very much opinion based.If you would change it to ask for any successful or the most successful predictions (plural), maybe it would be better
BB King
CC BY-SA 3.0
2016-06-09T17:49:32.387Z
It doesn't take an economist to predict that @DJSims will keep on trolling... just sayin'.
Graeme Walsh
CC BY-SA 3.0
2016-06-09T20:17:11.233Z
I am closing this question because I do not believe that it is possible to identify *the most successful* economic prediction in a manner that is not opinion based. I think a question that asks for literature references with evidence of consistently successful predictions, on the other hand, would be quite legitimate. Please edit the question accordingly.
Ubiquitous
CC BY-SA 3.0
2016-06-10T05:34:38.690Z
Then you're wrong because I gave clear criteria
D J Sims
<macroeconomics><microeconomics>
What is the most successful economic prediction?
D J Sims
# What is the most successful economic prediction?

(Asked by: username_0 on 2016-06-09)

The question above is closed and unanswered. Stop dodging the question.

I am asking for one example.

Successful defined as:

1. Has been consistently correct for the longest number of years
2. Has been specifically mentioned in the economic literature as an example of a successful economic prediction

**Tags:** macroeconomics, microeconomics
> **Comments:**
> **username_1**: I removed the bits that explained how awesome your question was as they have nothing to do with the economic content of the question. Feel free to roll back the edit. I think you should also remove the word "most" as it makes the question opinion based.  
> **username_2**: I'd say the laws of demand and supply fit these criteria and are pretty cool.  
> **username_3**: I think you'll have to narrow it down a bit. Maybe pick a specific economic field and more criteria, Otherwise there are countless possible answers to your question.  
> **username_0**: That doesn't matter bb. I am only asking for one.  
> **username_4**: Possible duplicate of [Has economics ever provided useful predictions?](http://economics.stackexchange.com/questions/12265/has-economics-ever-provided-useful-predictions)  
> **username_0**: That question was closed unanswered for no reason. Stop dodging the question.  
> **username_3**: DJ Sims, the way I understood it is that you're not asking for one, nut rather for THE one. The latter is a much harder question, which is very much opinion based.If you would change it to ask for any successful or the most successful predictions (plural), maybe it would be better  
> **username_5**: It doesn't take an economist to predict that @DJSims will keep on trolling... just sayin'.  
> **username_6**: I am closing this question because I do not believe that it is possible to identify *the most successful* economic prediction in a manner that is not opinion based. I think a question that asks for literature references with evidence of consistently successful predictions, on the other hand, would be quite legitimate. Please edit the question accordingly.  
> **username_0**: Then you're wrong because I gave clear criteria  

---

## 1 answers

### Answer by username_2 on 2016-06-09. Score: 6

The Law of Supply (LOS) and the Law of Demand (LOD) are the two most successful economic predictions. I know you asked for one example, but these concepts run hand in hand, and are often thought of as one general concept. One of the earliest mentions of ideas like LOS and LOD was in 1691 by the philosopher John Locke in his publication "Some Considerations on the Consequences of the Lowering of Interest and the Raising of the Value of Money." However it was noticed well before then (it just wasn't in a published work).

The LOD says that if the price of a good decreases, the quantity demanded for that good will increase (as long as consumers are able to purchase more). This prediction has been realized more times than we can count. There is really only one exception to the LOD, and that is giffen goods. However, seeing that there are only a handful of cases where a giffen good has been observed, they make up a minute fraction of the total number of observations.

The LOS says that if the price of a good increases, the quantity supplied for that good will increase (as long as firms are able to produce more). Again, this prediction has been realized more times than we can count. I cannot think of any exceptions to the LOS.

These two laws are the most successful predictions in economics (in my opinion) because they are the basis for all of economics. If these two laws were not true, most of economics wouldn't be as it is today.

> **Comments:**
> **username_0**: Actually, the entire discipline of Keynesianism was created to develop models where those predictions don't hold. Do you have  a more specific example?  
> **username_2**: @DJSims it seems as you were the one who made the claim, the burden of proof or example falls on you. I'm not quite sure to what models you are referring when you make your claim. Where in Keynesianism is the assumption that the law of supply and the law of demand do not hold? As far as I know, in Keynesianism, we still have a downward sloping demand curve and an upward sloping supply curve.  
> **username_2**: @DJSims Classical economics vs. Keynesian economics has absolutely nothing to do with the validity of LOD or LOS, so what is the point you are trying to make here?  
> **username_2**: @DJSims Ok, if that is the point you are trying to make, then try to come up with a reason as to why it does not make sense that actually pertains to the answer I have provided.  
> **username_2**: I did though. The prediction made by the LOD or LOS is exactly the same as any other predictive proposition in economics: If x then y. In my example (LOS) it is: If the price of a good increases, then the quantity supplied of that good will increase. In another example it could be: If the U.S. debt gets to be $20 trillion, then the U.S. will default on it. These two are both economic propositions that predict an outcome given an event. I can list a specific example if you would like. If the price of a desk increases, the firm that makes the desk will produce more desks.  
> **username_2**: Yes it has. Any prediction is tested on whether it occurs or not. Both of these, as I stated in my answer, have been proven correct countless times.  

---

