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.


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

References in periodicals archive ?
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.
For example, during the period when supply-side economics took hold in conservative circles, most of the institute's top economists were basically Keynesian moderates, such as Herbert Stein.
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.
Most American Jews remain staunch Democrats, and supply-side economics never gained a mass following among the New York intelligentsia.
Bartlett says that supply-side economics was highly successful to address the twin problems of unemployment and inflation, and that its premises have become absorbed into mainstream economic thought.
I've always been surprised that so many environmentalists, typically found on the political left, are such stalwart believers in the conservative doctrine of supply-side economics.
Efficient markets | Quiggin is unpersuasive on his three other candidates for "zombie" ideas: the Efficient Market Hypothesis (EMH), supply-side economics (which he calls "trickle-down economics"), and privatization.
It allows Democrats to explain what the Bush tax cuts really did, why supply-side economics is bogus, and the economic challenge ahead.
examines America's last economic crisis, the "stagflation" of the 1970s, and how economists, journalists, Washington staffers, and politicians helped America get out of the recession through supply-side economics.
In the 1970s, conservative intellectuals and opinion makers turned to supply-side economics as the centerpiece of their economic program, as evidenced in Jude Wanniski's The Way the World Works (1978), which was given prominence in Robert Bartley's editorials for the Wall Street Journal.
Analysts say government action is needed to tame rising food prices caused by insufficient rainfall and a monetary policy that cannot tackle supply-side economics bottlenecks.
In earlier papers, we have shown the relevance of aggregate demand elasticity for monetary policy rules and supply-side economics.