What Are Supply Side Policies?

Supply side policies held particular sway during the presidency of Reagan, pictured second from the right.

The policies of supply-side economics became well-known during the administration of U.S. President Ronald Reagan due to its influence on some Reagan administration policy makers. This has led some supply-side policies to be referred as "Reaganomics" in popular usage.

Emphasis

Supply-side economics emphasizes economic growth through the elimination of impediments to the supply and efficient use of the factors of production.

Controversy with Keynesians

Supply-side economics is in rivalry with the Keynesian school of economic thought, which focuses instead on how government policy can help the economy by stimulating and restraining short-run aggregate demand.

Deregulation

One supply-side policy is the deregulation of highly-regulated industries.

Lower Taxes

Supply-siders believe that high taxes cause people to do less work and invest more foolishly than they otherwise would, and so recommend lower and more uniform tax rates along with the repeal of business subsidies and loopholes.

Free Trade

Supply-siders support increasing competition by lowering protectionist barriers to international trade.

References

• Glossary of Political Economy Terms: Supply Side Economics