Schools of Thought
Supply-Side Economics
Also Known As Trickle-Down Economics Used broadly by critics rather than by the school's own proponents; Reagan OMB director David Stockman stated plainly in a 1981 Atlantic Monthly interview that supply-side theory is trickle-down theory, the clearest documented equation of the two terms.
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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 Cross-Tradition 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.
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.
Sources
1. Wikipedia
Wikimedia FoundationSupply-side economicsQuote, Supply-side economics
Supply-side fiscal policies are designed to increase aggregate supply, as opposed to aggregate demand.
1. Wikipedia
Wikimedia FoundationSupply-side economics, Definition and principlesView the Source 1. Wikipedia
1. Wikipedia
Wikimedia FoundationTrickle-down economics, HistoryQuote, Trickle-down economics, History
Supply-side is 'trickle-down' theory.
1. Wikipedia
Wikimedia FoundationDebated With: Keynesian Economics, Supply-side economics, relation to Keynesian economicsView the Source 1. Wikipedia
Wikimedia FoundationAssociated Figures and Events: Arthur Laffer, Arthur Laffer, Role as Reagan Advisor and Supply-Side EconomicsQuote, 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)
1. Wikipedia
Wikimedia FoundationAssociated With: Laffer Curve, Arthur Laffer, Role as Reagan Advisor and Supply-Side EconomicsQuote, Associated With: Laffer Curve, Arthur Laffer, Role as Reagan Advisor and Supply-Side Economics
is associated with supply-side economics
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