Did you know Concept in Reaganomics?

By Malvika Kashyap

April 30, 2022

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Ronald Reagan's economic initiatives during his administration in the 1980s are known as Reaganomics.

What is Reaganomics?

It was founded on the principles of (1) lower government expenditure, (2) lower taxes, (3) less regulation, and (4) a slower expansion of the money supply to prevent inflation.

Reaganomics key concepts

The principles of supply-side economics and the trickle-down hypothesis were an element of Reaganomics.

Understanding Reaganomics

The Federal Reserve Board was boosting the short-term interest rate, which was reaching its highest in 1981, to combat excessive inflation.

Objectives of Reaganomics

In order to clear the field for the free market, he proposed a number of measures designed to reduce government interference and make it easier to do business.

Factors of Reaganomics

President Ronald Reagan dramatically reduced taxes. The top marginal tax bracket's income tax rate was reduced from 70% to 50%, and corporation and estate taxes were slashed dramatically.

Reduced Taxes

Reaganomics prioritised national defence over domestic projects because he believed the United States was vulnerable to a Window of Vulnerability.

Reduced government spending

Cable, long-distance telephone service, interstate transportation service, and ocean shipping were all deregulated by President Ronald Reagan.

Reduced regulation

The central bank uses a contractionary monetary strategy when it raises interest rates to make lending more expensive in order to keep inflation under control.

Slow down money growth

President Ronald Reagan sought to encourage economic activity and lessen reliance on the welfare state by cutting government spending and taxes and making entrepreneurship easier.


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