supply-side economics


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supply-side economics,

economic theory that concentrates on influencing the supply of labor and goods as a path to economic health, rather than approaching the issue through such macroeconomic concerns as gross national product. In the United States during the 1980s, supply-side economics was associated with conservative proponents of the free-market system. Such measures as tax cuts and benefit cuts to the unemployed are basic supply-side tactics, with the intention of increasing the incentive to work and produce goods and services. The theory holds that high marginal tax rates and government regulation discourage private investment in areas that fuel economic expansion, and that more capital in the hands of the private sector will "trickle down" to the rest of the population. The theory gained popularity during the late 1970s, with a tax revolt in California and economic hardship during the CarterCarter, Jimmy
(James Earl Carter, Jr.), 1924–, 39th President of the United States (1977–81), b. Plains, Ga, grad. Annapolis, 1946.

Carter served in the navy, where he worked with Admiral Hyman G. Rickover in developing the nuclear submarine program.
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 administration (1977–81). Arthur Laffer and his "Laffer curve" doctrine became the heart of the economic programs of Ronald ReaganReagan, Ronald Wilson
, 1911–2004, 40th president of the United States (1981–89), b. Tampico, Ill. In 1932, after graduation from Eureka College, he became a radio announcer and sportscaster.
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's presidency, during which tax rates were cut substantially. Although supply siders maintain that the tax cuts of the 1980s were responsible for the decade's economic growth, critics argue that such policies caused massive federal deficits, penalized the poor and middle class, and induced excessive speculation that severely damaged America's economy. The subsequent tax increases under Presidents George H. W. Bush and Bill Clinton and the concurrent corporate investment, economic growth, and drop in unemployment during the 1990s further undercut supply-side suppositions.

Bibliography

See V. Canto, Foundations of Supply-Side Economics (1983); R. L. Bartley, The Seven Fat Years (1992).

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References in periodicals archive ?
We can thank Bartley for making supply-side economics understandable, popular, and influential.
Republicans these days don't often use the term "supply-side economics," which has been pejoratively dubbed "(https://www.thebalance.com/trickle-down-economics-theory-effect-does-it-work-3305572) trickle-down " or even "(http://www.investopedia.com/terms/v/voodooeconomics.asp) voodoo " economics 6 the latter by none other than former President George H.
Despite the clarity of my explanations in The Supply-Side Revolution (Harvard University Press, 1984), The New Palgrave Dictionary of Money and Finance (1992), The McGraw-Hill Encyclopedia of Economics (1994), Zeitschrift fur Wirtschaftspolitik (38 Jahrgang 1989), Rivista di Politica Economica (Maggio 1989), The Public Interest (Fall 1988) and http://www.paulcraigroberts.org/2017/07/17/supply-side-economics-fheory-results/, the myth has been established that supply-side economics is about tax cuts paying for themselves.
The accession of supply-side economics was among the Journal's most consequential initiatives.
The marketplace concept opened the door to "policies that lacked significant rigor: the barrier for entry of those ideas into the policy debate was now extremely low," says Stahl, as he recounts the evolution of supply-side economics with blistering contempt.
Instead of supply-side economics, we should return to the demand-side economics of Franklin Roosevelt.
The supply-side economics that culminated in the tax cut of 1981 first arose in the mainstream of academic economics, in the early 1960s work of economist Robert A.
He devotes a couple of pages to his first encounter with supply-side economics in the late 1970s and writes, "Maybe I am only an amateur, but the logic makes sense to me."
A demonstration of a MOOC-based course on Supply-side Economics: Taxation from Warren Harding to Ronald Reagan can be accessed at www.educourses.net/503
At this point, supply-side economics have been examined, analyzed, debated, celebrated and rejected ad nauseam.
Economists subscribe to a host of other theories including supply-side economics" (p.
Deviating from FDR's New Deal, Reagan administration emphasized upon 'supply-side economics' by insisting on 'trickle-down' efforts.