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'''Supply-side economics''' is a [[macroeconomics|macroeconomic]] concept developed in the 1970's as a counter to the dominant Keynesian macroeconomic theory  during the years of [[stagflation]].  Before the early 1980's Keynesian views predominated.   

'''Supply-side economics''' is a [[macroeconomics|macroeconomic]] concept developed in the 1970's as a counter to the dominant Keynesian macroeconomic theory  during the years of [[stagflation]].  Before the early 1980's Keynesian views predominated.   

Economist [[John Maynard Keynes]] believed that "demand creates supply". This concept drove many of the ideas behind the recovery from the Great Depression.  Government played a role in subsidizing individuals by giving them jobs and therefore an income to have to spend on goods.  This "demand-side" theory posited that demand would create supply, and feedback to in turn create more demand.   

Economist [[John Maynard Keynes]] believed that "demand creates supply" (see [[Law of supply and demand]]). This concept drove many of the ideas behind the recovery from the Great Depression.  Government played a role in subsidizing individuals by giving them jobs and therefore an income to have to spend on goods.  This "demand-side" theory posited that demand would create supply, and feedback to in turn create more demand.   

Supply-side theory is based on Say's law, which, paraphrased, states that supply creates its own demand.  A simplified version of these ideas were taken up as a popular political movement during the 1980 election campaign, with [[Ronald Reagan]] proposing a modified policy of supply-side economics (although [[liberals]] disparagingly used the term "trickle-down" economics). <ref>[http://www.investopedia.com/articles/05/011805.asp Understanding Supply-Side Economics], David Harper </ref> The decreased regulation begun in the late 1970s, together with lower marginal tax rates would provide enough savings and investment to pool new capital and drive economic growth. Manufacturers for example, would hire more people, produce more, and create more demand and economic activity.  The idea gained wide popular support, and became known as "Reaganomics".  

Supply-side theory is based on Say's law, which, paraphrased, states that supply creates its own demand.  A simplified version of these ideas were taken up as a popular political movement during the 1980 election campaign, with [[Ronald Reagan]] proposing a modified policy of supply-side economics (although [[liberals]] disparagingly used the term "trickle-down" economics). <ref>[http://www.investopedia.com/articles/05/011805.asp Understanding Supply-Side Economics], David Harper </ref> The decreased regulation begun in the late 1970s, together with lower marginal tax rates would provide enough savings and investment to pool new capital and drive economic growth. Manufacturers for example, would hire more people, produce more, and create more demand and economic activity.  The idea gained wide popular support, and became known as "Reaganomics".