On October 24 and 25, 1980, the Center for the Study of American Business at Washington University and the Federal Reserve Bank of St. Louis cosponsored their fifth annual conference, "The Supply-Side Effects of Economic Policy." This volume contains the papers and comments delivered at that conference. Proponents of "supply-side economics" have challenged the policy recommendations that emerge from "Keynesian" macroeconometric models. These models focus on the effects of economic policy on the demand for output. Supply-side economics, in contrast, emphasizes the response of output to changes in the supply of inputs. Decisions affecting the capital stock and employment-in particular, saving and investment decisions and labor force participation and hours decisions-are the focus of the supply-siders' attention. The 1980 conference examined most of the major themes associated with supply-side economics. The papers in Part I of this volume develop the theory underlying various supply-side propositions and present empirical evidence in support of some of these propositions. In Part II, the effect of taxes on capital formation and the effect of increased capital formation on output growth and inflation are examined. The effect of tax and transfer programs on labor supply, employment and unemployment are examined in Part III. The final section contains the special luncheon and dinner presentations.
Table of ContentsI: Theory and Evidence.- Tax Rates, Factor Employment, and Market Production.- An Econometric Model Incorporating the Supply-Side Effects of Economic Policy.- Thoughts on the Laffer Curve.- Discussion of the Evans Paper.- Discussion of the Evans Paper.- II: Saving and Investment.- The Effect of Economic Policy on Investment.- Estimates of Investment Functions and Some Implications for Productivity Growth.- Discussion of the Summers Paper.- III: Labor Supply and the Natural Rate of Unemployment.- Income and Payroll Tax Policy and Labor Supply.- Transfers, Taxes and the NAIRO.- Discussion of the Hausman Paper.- Discussion of the Hamermesh Paper.- IV: Luncheon and Dinner Speeches.- The Power of Negative Thinking: Government Regulation and Economic Performance.- The Politics of Supply-Side Economics.- List of Participants.