SupplySide

SupplySide - Supply-Side Economics Supply-Side...

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Supply-Side Economics Supply-Side Economics Macroeconomics S. Cunningham
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2 Supply-side History Supply-side History François Quesnay and the physiocrats: Around the year 1750. Emphasized the importance of property rights in a market economy Argued that excessive taxation diminishes output Argued that high tax rates: Kill growth. May diminish tax receipts, whereas lowering tax rates may result in such rapid growth as to increase tax receipts.
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3 History, continued History, continued Adam Smith in the Wealth of Nations (1776) writes that taxes reduce the incentive to work and firms to employ. Jean Baptiste Say (1821) argued: “high taxes impoverish the individual without enriching the state”, and high taxes are “economic suicide”. Karl Marx in Das Kapital (1867) writes: Over-taxation is a principle in Europe
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4 Redistribution Redistribution Keynes claimed Malthus (ca. 1820) as his logical predecessor. Malthus feared short-run inadequate demand as a result of over-saving: Profits go to owners of capital (capitalists). The capitalists are rich, therefore tend to save (I.e., they have a lot of discretionary income). As a larger and larger portion of income goes to the
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This note was uploaded on 02/25/2012 for the course CHEM 309 taught by Professor Staff during the Spring '11 term at UConn.

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SupplySide - Supply-Side Economics Supply-Side...

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