This macroeconomic thought argues that a government can facilitate the growth of an economy by lowering the barriers in the production of products and services. By lowering the barriers, this would mean tax cuts. Keynesian macroeconomics on the other hand is the theory’s direct contrast because it focuses mainly on demand as compared to Supply-Side Economics’ focus on supply. The term was coined by a journalist in 1975, a few years after the oil crisis in the year 1973. The theory is not as new as it seems though because it was traced back to early economic thinkers. Among these thinkers are Ibn Khaldun, Adam Smith, David Hume, Jonathan Swift, and Alexander Hamilton.

The crux of the theory is to supply more goods to have more demand for other products. In 1978 the journalist who coined the term “Supply Sided Economics” published his work entitled “The Way the World Works”. The book laid out the ins and outs of the theory along with detailing high tax rates and progressive income tax systems in the US. Apart from that, the book also dwelled on the politics of it all i.e. Nixon’s monetary policy. Basically, the journalist advocated lower taxes.

 In the year 1983, economist Victor Canto published his book on “The Foundations of Supply-Side Economics” focusing on the fundamentals and foundations of the theory. Canto promised long term results of the theory but the younger generation of supply-siders are promising short term ones.

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