Supply-side economics | |
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Born | August 14, 1940 Youngstown, Ohio |
Nationality | American |
Field | Political economics |
Alma mater | Stanford (PhD, 1971; MBA, 1965) Yale (BA, 1962) |
Influences | John Maynard Keynes |
Contributions | Laffer Curve |
Arthur Betz Laffer ( /ˈlæfər/;[1] born August 14, 1940) is an American economist who first gained prominence during the Reagan administration as a member of Reagan's Economic Policy Advisory Board (1981–1989). Laffer is best known for the Laffer curve, an illustration of the theory that there exists some tax rate between 0% and 100% that will result in maximum tax revenue for governments. He is the author and co-author of many books and newspaper articles, including Supply Side Economics: Financial Decision-Making for the 80s. Laffer is Policy Co-Chairman (with Lawrence "Larry" Kudlow) of the Free Enterprise Fund.
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Laffer was born in Youngstown, Ohio, the son of Marian Amelia "Molly" (née Betz), a homemaker and politician, and William Gillespie Laffer, a president of the Clevite Corporation.[2][3][4] Laffer received a BA degree in economics from Yale University in 1962. He graduated from Stanford University with an MBA in 1965 and a PhD degree in economics in 1971.
Laffer was a tenured professor at the University of Chicago Graduate School of Business at the time of his discussion of the Laffer Curve with Nixon/Ford administration officials. Later on, after leaving the University of Chicago and during his tenure at the University of Southern California, Marshall School of Business, Laffer played a key role in the writing of Proposition 13, the California property tax cap initiative that inspired similar initiatives in other states.
During the mid-1980s, Laffer left to teach at Pepperdine University in nearby Malibu. Laffer remained on the faculty for several years.
In 1986, Laffer was a Republican primary candidate for the US Senate in California. (Congressman Ed Zschau won the nomination and lost in the general election to the incumbent Democrat, Alan Cranston). Laffer identifies himself as a staunch fiscal conservative and libertarian. He has stated publicly that he voted for President Bill Clinton in 1992 and 1996.[5] Laffer references President Clinton's conservative fiscal policies as cornerstones of his support.[6]
He was named a Distinguished University Professor of Economics by Mercer University (Georgia) in 2008.[7]
Laffer is the founder and CEO of Laffer Associates in Nashville, Tennessee, an economic research and consulting firm that provides global investment-research services to institutional asset managers, pension funds, financial institutions, and corporations.
He sits on the board of directors of several public and private companies. Laffer has been appointed to the advisory board of Sonenshine Partners, an independent investment bank focused on providing integrated strategic, financial and corporate advisory services. In 2004 Laffer joined the Board of Pillar Data Systems, a non-public Data Storage Company funded by Tako Ventures, a funding arm of Larry Ellison. In 2008, Laffer joined the Board of Alpha Theory, a non-public Fundamental Portfolio Optimization software for hedge and mutual funds.
In 2010, Laffer joined the Boards of Executive Trading Solutions, an LLC providing the top technological solution for management of Rule 10b51 stock trading plans, and Consensus Point, a provider of an enterprise prediction markets platform.
Laffer also regularly writes opinion articles in The Wall Street Journal.[8]
Although he does not claim to have invented the Laffer curve concept (Laffer, 2004), it was popularized with policy-makers following an afternoon meeting with Nixon/Ford Administration officials Dick Cheney and Donald Rumsfeld in 1974 in which he reportedly sketched the curve on a napkin to illustrate his argument.[9] The term "Laffer curve" was coined by Jude Wanniski, who was also present. The basic concept was not new; Laffer himself says he learned it from Ibn Khaldun and John Maynard Keynes.[10]
A simplified view of the theory is that tax revenues would be zero if tax rates were either 0% or 100%, and somewhere in between 0% and 100% is a tax rate which maximizes total revenue. Laffer's postulate was that the tax rate that maximizes revenue was at a much lower level than previously believed: so low that current tax rates were above the level where revenue is maximized.
This is significant because of Laffer's Reagan connections.
The following is a partial list of publications for which Arthur B. Laffer is an author (mainly focusing on articles for which he is first author), in descending order by date.