ABSTRACT
When economists speak of demand they mean effective demand. Effective demand is money backed desire. It is not the demands of a crying baby or of a spoilt child wanting and grabbing at everything it sees. Demand from an economist’s point of view is real, ‘genuine’ demand backed by the ability to make a purchase. It is distinct from need. For example, in 2012 the total number of households in England needing accommodation exceeded the total number of homes in the housing market. Only those who had sufficient means to ‘demand’ accommodation – that is, they could afford to buy or rent at market prices – were confident of securing somewhere to live. This anomaly explains the number of homeless people living in bed and breakfast hostels at a cost to the government.
