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Arthur Betz Laffer (Template:Pron-en; born August 14, 1940) is an American economist who became influential during the Reagan administration as a member of Reagan's Economic Policy Advisory Board (1981–1989). Laffer is also known for the Laffer curve, an illustration of tax elasticity which asserts that, in certain situations, a decrease in tax rates could result in an increase in tax revenues.

Life and career

Laffer was born in Youngstown, Ohio. 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. 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.

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.

At the time of the now famous napkin incident with Jude Waniski, Don Rumsfeld and Dick Cheney, Laffer was a tenured professor at the University of Chicago Graduate School of Business. Later on, after leaving U of C 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 spawned a host of similar laws around the United 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 is the author and co-author of many books and newspaper articles, including Supply Side Economics: Financial Decision-Making for the 80s.

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 is Policy Co-Chairman (with Lawrence "Larry" Kudlow) of the Free Enterprise Fund. Laffer identifies himself as a staunch fiscal conservative and libertarian. He has stated publicly that he supported President Bill Clinton in 1992 and 1996. Laffer references President Clinton's conservative fiscal policies as cornerstones of his support.

Professional activities

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.

He was named a Distinguished University Professor of Economics by Mercer University (Georgia) in 2008.

Laffer said on CNN in 2009: "If you like the post office and the Department of Motor Vehicles and you think they're run well, just wait till you see Medicare, Medicaid and health care done by the government."

In 2010, Laffer joined the Board of Executive Trading Solutions.

Publications

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.

• Arthur B. Laffer, "The U.S. Balance of Payments—A Financial Center View," Law and Contemporary Problems 34 (1), p. 33-46 (1969).
• Arthur B. Laffer, "Vertical Integration by Corporations, 1929-1965," Review of Economics and Statistics 51 (1), p. 91-93 (1969).
• Arthur B. Laffer, "Trade Credit and the Money Market," J. Political Economy 78 (2), 239-267 (1970).
• Arthur B. Laffer and Eugene F. Fama, "Information and Capital Markets" J. Business 44 (3), p. 289-298 (1971).
• Arthur B. Laffer and R. David Ranson, "A Formal Model of the Economy," J. Business 44 (3), p. 247-270 (1971).
• Arthur B. Laffer and Eugene F. Fama, "The Number of Firms and Competition", American Economic Review 62 (4), p. 670-674 (1972).
• Arthur B. Laffer, "Monetary Policy and the Balance of Payments," J. Money, Credit, and Banking Part I 4 (1), 13-22 (1972).
• Arthur B. Laffer and Richard Zecher, "Some Evidence on the Formation, Efficiency and Accuracy of Anticipations of Nominal Yields," J. Monetary Economics 1 (3), p. 327-342 (1975).
• Victor A. Canto, Douglas H. Joines, and Arthur B. Laffer, Foundations of Supply-Side Economics—Theory and Evidence (New York: Academic Press, 1982).
• Arthur B. Laffer, "Reinstatement of the Dollar: The Blueprint," Economic Notes 0 (2), p. 158-176 (1982).
• Arthur B. Laffer, "A High Road for the American Automobile Industry," World Economy 8 (3), p. 267-286 (1985).
• Arthur B. Laffer, "The Ellipse: An Explication of the Laffer Curve in a Two-Factor Model," The Financial Analyst's Guide to Fiscal Policy, p. 1-35 (New York: Greenwood Press, 1986).
• Arthur B. Laffer, "Heightened foreign competition only route for American prosperity," The Journal Record (9 June 1987).
• Arthur B. Laffer, "America in the World Economy: A Strategy for the 1990s: Commentary," America's Global Interests: A New Agenda, p. 122-125 (London: Norton, 1989).
• Arthur B. Laffer and Christopher S. Hammond, "Either California's Housing Prices Are Going to Fall or California's in for One Helluva Rise in Personal Income," Investment Strategy and State and Local Economic Policy, p. 49-64 (London: Quorum Books, 1992).
• Arthur B. Laffer, "Trading Policy Outlook," Industrial Policy and International Trade, p. 175-186, Volume 62 in Contemporary Studies in Economic and Financial Analysis (London: JAI Press, 1992).
• Arthur B. Laffer, "The Reagan-Clinton Presidency," International Economy 12 (2), 22-24 (1998).
• Arthur B. Laffer and Thomas J. Martin, "Bullish on Japan," American Spectator p. 28-30 (1 June 2001).
• Arthur B. Laffer, "The Laffer Curve: Past, Present, and Future," Heritage Foundation Backgrounder #1765 (1 June 2004).
• Arthur B. Laffer, "The Tax Threat to Prosperity", Wall Street Journal (January 25, 2008).
• Arthur B. Laffer, "The Age of Prosperity Is Over", Wall Street Journal (October 27, 2008).
• Arthur B. Laffer and Stephen Moore, "Soak the Rich, Lose the Rich", Wall Street Journal (May 19, 2009).
• Arthur B. Laffer, "Get Ready for Inflation and Higher Interest Rates", Wall Street Journal (June 11, 2009)
• Arthur B. Laffer, "The Prognosis for National Health Insurance: A Colorado Perspective, Independence Institute (August 2009)
• Arthur B. Laffer, "Taxes, Depression, and Our Current Troubles", Wall Street Journal (September 22, 2009)

References

1. http://dictionary.reference.com/browse/laffer+curve
2. http://www.polyconomics.com/gallery/Napkin003.jpg
3. The Laffer Curve: Past, Present, and Future
4. http://yale1962.org/speakout/?p=41
5. Arthur B. Laffer and Stephen Moore,Return to Prosperity, Threshold Editions, p. 26, Feb 2010
6. http://www2.mercer.edu/News/Articles/2008/080520professors.htm
7. http://mediamatters.org/mmtv/200908040014

External links

• Jude Wanniski, "Sketching the Laffer Curve," The Yorktown Patriot (14 June 2005)

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• 1940 births
• Economists
• Living people
• American libertarians
• Libertarian economists
• People from Youngstown, Ohio
• Stanford University alumni
• Supply-Side Economists
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• Yale University alumni