The Supply Side and Demand Side Economics: Which Works Best?

Economics Discussion
Name
Institutional Affiliation
Economics Discussion
Supply-Side Economics
This is a macroeconomic theory that operates on the premise that an increase in the supply of goods results in a country’s economic growth (Awrey, 2013). The theory’s main argument is that economic growth can be unlocked through decreasing regulation on financial activities and lowering the corresponding taxes. The focus of this theory, therefore, influences the due supply of goods and labor, using various benefits such as tax cuts as incentives for people to work hard and produce marketable goods. The first major proponent of the theory was economist Arthur Laffer and later, an implementation by former President Ronald Reagan.
Demand Side Economics
This macroeconomic theory posits that high employment rates and economic growth can be effectively created by increasing the demand for services and products, thus maintaining that effective demand determines output (Strbac, 2008). Economists who support this theory posit that con...