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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
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  • $\begingroup$ 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. $\endgroup$
    – Giskard
    Jun 9, 2016 at 12:44
  • $\begingroup$ I'd say the laws of demand and supply fit these criteria and are pretty cool. $\endgroup$
    – DornerA
    Jun 9, 2016 at 12:59
  • $\begingroup$ 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. $\endgroup$
    – BB King
    Jun 9, 2016 at 13:43
  • $\begingroup$ That doesn't matter bb. I am only asking for one. $\endgroup$
    – D J Sims
    Jun 9, 2016 at 15:22
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    $\begingroup$ It doesn't take an economist to predict that @DJSims will keep on trolling... just sayin'. $\endgroup$
    – Graeme Walsh
    Jun 9, 2016 at 17:49

1 Answer 1

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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.

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  • $\begingroup$ Actually, the entire discipline of Keynesianism was created to develop models where those predictions don't hold. Do you have a more specific example? $\endgroup$
    – D J Sims
    Jun 9, 2016 at 15:22
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    $\begingroup$ @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. $\endgroup$
    – DornerA
    Jun 9, 2016 at 15:26
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    $\begingroup$ @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? $\endgroup$
    – DornerA
    Jun 9, 2016 at 15:40
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    $\begingroup$ 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. $\endgroup$
    – DornerA
    Jun 9, 2016 at 16:01
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    $\begingroup$ 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. $\endgroup$
    – DornerA
    Jun 9, 2016 at 16:07

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