Supply-side economics holds that economic growth is best fostered by lowering marginal tax rates, reducing regulation and enabling free trade, so as to expand production and supply rather than by managing aggregate demand. It developed in the 1970s in response to stagflation, associated with Arthur Laffer, Robert Mundell and the journalist Jude Wanniski, whose 1978 book The Way the World Works popularized the approach, and it shaped Reagan-era tax policy in the 1980s.
Facts
Start YearDeveloped across the 1970s in response to stagflation; associated with Arthur Laffer, Robert Mundell and Jude Wanniski, and with Reagan-era tax policy in the 1980s. Core TenetLower marginal tax rates raise the after-tax reward for work, saving and investment, expanding aggregate supply; the Laffer curve holds that this effect can be strong enough that, past some point, cutting tax rates increases rather than decreases total government revenue. 1 Supply-Side Economics
Connections
Associated Figures and Events
Laffer served on Reagan's Economic Policy Advisory Board (1981-1989) and is the school's most prominent popularizer through the Laffer Curve.
Source Wikipedia
Associated With
Held Differently
Why this is disputed. Supply-side economics emerged as an alternative to Keynesian demand management, arguing that expanding aggregate supply through lower marginal tax rates and lighter regulation, not stimulating aggregate demand, is the effective route to growth.
Source Wikipedia
Sources
1. Wikipedia
Wikimedia FoundationSupply-side economics
Supply-side fiscal policies are designed to increase aggregate supply, as opposed to aggregate demand.
Trickle-down economics, History
Supply-side is 'trickle-down' theory.
- Debated With: Keynesian Economics, Supply-side economics, relation to Keynesian economics
Associated Figures and Events: Arthur Laffer, Arthur Laffer, Role as Reagan Advisor and Supply-Side Economics
a member of President Ronald Reagan's Economic Policy Advisory Board for both of his terms (1981-1989)
Associated With: Laffer Curve, Arthur Laffer, Role as Reagan Advisor and Supply-Side Economics
is associated with supply-side economics
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