Sup­ply-side time­line

China Daily (Canada) - - ANALYSIS -

In­tel­lec­tual ori­gins based on the writ­ings of clas­si­cal econ­o­mists Adam Smith and David Hume. Jean-Bap­tiste Say (17671832), in his ATrea­tiseon Po­lit­i­calE­con­omy, came up with Say’s Law, which has been in­ter­preted as “sup­ply cre­ates its own de­mand”. The Chicago school of econ­o­mists in­clud­ing No­bel lau­re­ate Ron­ald Coase and, more fa­mously, Mil­ton Fried­man, chal­lenged the then Key­ne­sian or­tho­doxy of de­mand man­age­ment poli­cies that in­flu­enced much of the think­ing of West­ern gov­ern­ments. They ar­gued that gov­ern­ments should let free mar­kets op­er­ate and that their only role was to con­trol money sup­ply, hence the term mon­e­tarist. There is de­bate about whether the term sup­ply-side eco­nom­ics was first used by the jour­nal­ist Jude Wan­nin­ski or by Her­bert Stein, a for­mer eco­nomic ad­viser to pres­i­dent Richard Nixon. While teach­ing in Cal­i­for­nia, econ­o­mist Arthur Laf­fer de­vel­oped his the­ory, later known as the Laf­fer Curve, which il­lus­trated that tax rev­enues could fall if tax rates rose above a cer­tain point. His work proved highly in­flu­en­tial in the devel­op­ment of Reaganomics. Reaganomics. Ron­ald Rea­gan was elected in 1980 and pur­sued a tax-cutting and dereg­u­la­tion agenda that was largely built on a new sup­ply-side and mon­e­tarist ap­proach. Thatcherism. Bri­tish Prime Min­is­ter Mar­garet Thatcher was in­flu­enced by Aus­trian econ­o­mist Friedrich Hayek, who was not a fan of mod­ern sup­ply-side eco­nom­ics. None­the­less, her curb­ing of trade union pow­ers and pri­va­ti­za­tion of na­tion­al­ized in­dus­tries are seen as sig­nif­i­cant sup­ply-side mea­sures.

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