Micro and macro are different. We have to be careful about drawing macro conclusions from what happens at the micro level. We can't just extrapolate. This is in response to Casey Mulligan's post on evidence that supply matters. He draws macro conclusions about aggregate supply from micro evidence about relative supply.
The short-side rule says that actual sales are determined by whichever is less: quantity demanded; or quantity supplied. In this case the short side of the market is the demand side. Aggregate output is determined by aggregate demand. Aggregate supply does not affect aggregate output.
That says nothing about the determination of relative output of various sub-sectors of the economy. A change in relative demand may change relative prices and relative output and employment across different sectors of the economy. A change in relative supply may also change relative prices and relative output and employment across different sectors of the economy.
Imagine there's a fixed amount of tradeable permits to produce pollution. That creates a perfectly inelastic demand for pollution. Shifts in the supply curve have no effect on the total quantity of pollution. But because the permits are tradeable, shifts in relative supply and demand will change the relative amounts of pollution produced in different sectors. If people want to buy, or sell, more Eastern goods, we get more pollution in the East, and less in the West, but the total amount stays the same. We cannot extrapolate from micro evidence to macro conclusions. What is true for each of the parts is not true of the whole.
The keynesian/monetarist vision of demand deficiency is just like that. Except we are talking about GDP, not pollution. And the tradeable permits are called "money".
Casey Mulligan has micro evidence that increases in supply in particular sectors cause increases in output and employment in that sector. He uses that micro evidence to draw macro conclusions about the effects of increases in aggregate supply. Those conclusions don't follow.
Of course, we could say that same thing about people who draw conclusions about macro fiscal multipliers from estimates of micro fiscal multipliers. They are mistaking shifts in relative demand for shifts in aggregate demand.