Knowra Reaganomics Reaganomics Reaganomics is the economic policy program associated with Ronald Reagan’s presidency, emphasizing tax cuts, deregulation, reduced domestic spending, and monetary restraint.
Economic growth and tax policy : Economic growth and tax policy examine how taxes affect production, investment, work, and aggregate output. Reaganomics treated lower marginal tax rates as a way to encourage work, saving, and investment.
Early 1980s recession : The early 1980s recession was a severe U.S. downturn spanning 1981–1982, marked by high unemployment and falling output. Tight monetary policy helped curb inflation but contributed to the recession during Reagan’s first years.
Arthur Laffer : Arthur Laffer is an American economist associated with the claim that tax rates can become high enough to reduce government revenue. His curve became a memorable symbol of the case for cutting marginal tax rates.
Keynesian economics : Keynesian economics emphasizes aggregate demand and the use of fiscal policy to stabilize economic fluctuations. Its demand-management tradition differs from Reaganomics’ emphasis on incentives and supply-side growth.
Supply-side economics : Supply-side economics emphasizes policies intended to expand production by improving incentives to work, invest, and produce. Its incentive-based argument supplied a central rationale for Reagan’s tax cuts.
Economic recovery : Economic recovery is the return of output, employment, and income growth after a downturn. The strong recovery after 1982 became a key argument for Reaganomics, alongside disputes over its causes.
Laffer curve : The Laffer curve describes a theoretical relationship between tax rates and tax revenue, with revenue falling at sufficiently high rates. It supported the possibility that tax cuts could partly offset their own revenue loss.
Monetarism : Monetarism is an economic school that stresses the role of money supply and monetary policy in controlling inflation and output. Monetary restraint accompanied Reaganomics, although Federal Reserve policy was not set by the White House.
Economic deregulation : Economic deregulation reduces or removes government rules governing business and markets. The administration sought to loosen rules in sectors including energy, transportation, and finance.
United States national debt : The United States national debt is the total outstanding federal borrowing accumulated over time. Federal deficits during the Reagan years sharply increased the national debt.
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