Can some one tell me what the economic theories are that are commonly used to create US Economic policies?
I often hear about the Laffer Curve and Keynesian Economics.
Any others?
This is for self-research, so I would appreciate it if people would put politics aside to help me out.
Thank you!
Jeff
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It would be wise to look up the Washington Consensus. In addition I think Democrats believe in Kaynes (who supports active government) and the Republicans support Neo-Classicals (which is more laissez faire) and the Real Business Cycle (RBC) theories. This is all from the macroeconomics side.
From the microeconomics side in terms of externalities (one of the motivations of government regulation), republican's generally support Coase type solutions which say to privatize everything (so perfect markets exist and everything is efficient). Democrats believe the government should play a role in fixing market failures and disagree that privatization solves these problems.
Basically economics has a theory to support any point of view, so depending on what you want to accomplish, their is probably associated support in the literature.