Q&A: Is There Anything to Supply-Side Economics?

Question: Hi Dr. Kimball - So i’m a Larry Kudlow fan- been so since 2005. Do I stand alone here? its easier to find a trend of more critics against Kudlow along with Supply Side Economics. I google SSE and the 1st page is flooded with why it doesn’t work. your thoughts much appreciated.

Answer:  I used to watch “The McLaughlin Group” all the time, and liked Larry Kudlow a lot there.

On your question about supply-side economics, It depends on what people mean by “supply-side economics.” At current rates, in my view neither incentive effects nor Keynesian multipliers are large enough for cutting taxes to raise revenue. But leaving that very specific tax issue aside, the supply-side is of crucial importance, much more important for long-run welfare than the demand side. That is a point I make at length in “The Deep Magic of Money and the Deeper Magic of the Supply Side.”

Several of my sub-blogs particularly address the supply side in many of their posts:

To me, that what I say in those posts is supply-side economics.