Article Image

IPFS News Link • Economy - Economics USA

SUPPLY-SIDE ECONOMICS, THEORY AND RESULTS

• http://www.paulcraigroberts.org,Paul Craig Roberts

Subsequently, I generalized the supply-side approach when I realized that changes in marginal tax rates altered relative prices and could shift the aggregate supply side curve. Until that time, economists assumed that fiscal policy only impacted the aggregate demand curve.

Today 42 years after this article and 36 years after the passage of the Economic Recovery Tax Act that constituted the supply-side economic policy of President Reagan, there is still scant understanding of the economics that cured stagflation and enabled Reagan to pressure the Soviets to end the Cold War.

For example, in Wikipedia's account Supply-Side economics is presented as a claim that cutting tax rates increases tax revenues. This is ignorant nonsense.


Home Grown Food