The Fundamental Forces of Supply and Demand

I’ve been waiting for a news story to come along to give me the excuse to post my favorite economics photo of the year. Now that the year is over, I figure I’ll just post it.

This photo illustrates the two most important forces in my life.

DESCRIPTIONSarah Miller Photography Matilda Wolfers studying the market for milk.

If you are thinking that only a true econo-geek would call supply and demand the two most important forces in his life, you’re partly right. I am an econo-geek. But more importantly, “supply” is actually my partner, coauthor and colleague, Betsey Stevenson, and “demand” is our newborn baby girl, Matilda Sloan Wolfers.

One of the most astute observations about “Mattie” came from Danny Kahneman. After a couple of long and pretty intense days talking about research (all with Matilda in tow), Danny observed that “Matilda has a very high tolerance for economics.” She does. Today we are packing for the American Economic Association annual conference in Atlanta — she’ll see you there — and by the time the gabfest concludes, she will have been to more economics conferences than I had been to by the end of graduate school.

Young Matilda celebrates her four-month birthday today, and she is very much responsible for ensuring that 2009 was a very special year for us. And all three of us wish you and your families the very best for 2010.


What was Matilda's motivation to choose your last name as opposed to Betsey's? Did the procurement of naming rights involve mostly upfront or deferred compensation? On the face of it it appears that the most economically oriented baby in the world was named by simply following an age old tradition (taking father's last name) by parents who have not followed an age old tradition (woman marrying and taking husband's last name before having children). Strange.


holy swizzle stick, what a great picture! so cute. congrats to all 3 of you and happy new year!


Great shirts. Good lookin' youngun. Congrats.

Leland Witter

So Josh, do you have a shirt that says "externality"?


Objectification? Especially since there are other sources of milk in the world?

Paul Valoker

There is a popular but invalid notion in US that is: without American consumers, the economy of China would collapse immediately. It doesn't hurt to ask this question: can most America consumers afford relative expensive stuff Made in USA? Evidently not. The matter of fact is: vast majority US consumers can only afford cheap stuff. Nobody force us to buy Chinese goods. We do it ourselves.
Prejudices and/or Patriotism rarely dictate consumer behavior, economic does.

Tanya Roberts

You know we think this is cute with the Supply & Demand mother and baby tops purchased from our store!
Thanks for supporting breastfeeding!
Tanya Roberts, Sole Proprietor

P.S. I will tweet your blog!


Congratulations on your beautiful daughter. As for objectifying, maybe so, but supply and demand are surely at work. My baby is 28, and I can still remember getting home at the end of the day, as fast as I could, hoping that demand would be high, since supply was! That picture gave me a laugh, and brought some great memories. All the best to you.

Rudy Ashcroft

Tip of Iceberg
Washington, D.C., Aug. 4, 2009 - The Securities and Exchange Commission today filed civil fraud and other charges against General Electric Company (GE), alleging that it misled investors by reporting materially false and misleading results in its financial statements.
The SEC alleges that GE used improper accounting methods to increase its reported earnings or revenues and avoid reporting negative financial results. GE has agreed to pay a $50 million penalty to settle the SEC's charges.
"GE bent the accounting rules beyond the breaking point," said Robert Khuzami, Director of the SEC's Division of Enforcement. "Overly aggressive accounting can distort a company's true financial condition and mislead investors."


There are four important forces in life. Strong force, weak force, electromagnetic force, and gravity.

Barbara Rubin

Congratulations!! And a gift quotation if you haven't already seen it, from a physicist:

I should like to suggest to you that the cause of all the economic troubles is that we have an economic system which tries to maintain an equality of value between two things, which it would be better to recognise from the beginning as of unequal value.

Paul Dirac


Too freaking cute.


Extreme case of microeconomics between monopoly and monopsony with an overbearing exogenous variable - dad.

Doctor Whom

I think this is backwards. Baby is the original Seller; baby sells self-esteem to mother, who purchases it with joules of free energy in milk, etc. A non-gratifying baby does not get fed! Baby becomes Buyer by age 3, in a supermarket asking for Cocoa Puffs!