Supply-side economics Supply-side economics Supply-side economics is a macroeconomic theory arguing that economic growth can be most effectively created by lowering taxes and decreasing regulation, by which it is directly opposed to demand-side economics. According to supply-side economics, consumers will then benefit from a greater supply of goods and services at lower prices and employment will increase. It was started by economist Robert Mundell during the Ronald Reagan administration. The Laffer curve is one of the main theoretical constructs of supply-side economics, the idea that lower tax rates when tax level is too high will actually boost government revenue because of higher
Arthur Laffer He has stated publicly that he voted for President Bill Clinton in 1992 and 1996. Laffer references President Clinton's conservative fiscal and unregulated market policies as cornerstones of his support. Although he does not claim to have invented the Laffer curve concept (Laffer, 2004), it was popularized with policy-makers following an afternoon meeting with Nixon/Ford Administration officials Dick Cheney and Donald Rumsfeld in 1974 in which he reportedly sketched the curve on a napkin to illustrate his argument. The term "Laffer curve" was coined by Jude Wanniski, who was also present. The basic concept was not new; Laffer himself says