Written especially for portfolio managers, financial analysts, and corporate economists, this volume considers the practical implications of government economic policies. The contributors illustrate how incentives and disincentives affect economic behavior and the performance of the economy through an in-depth discussion of monetary, fiscal, and international economic issues. In addition, the authors present a unique top-down approach that enables the reader to trace the impact of government policies through the economy and thereby discover the investment strategies most likely to be successful within a given policy context.The first section of the book focuses on monetary issues and explores issues related to inflation, likely government intervention mechanisms to control inflation, variants of the monetarist model, interpreting the demand curve, and the development of a portfolio strategy designed to take advantage of anticipated changes in financial variables. The next group of chapters looks at supply-side economics and analyzes the effects of the economic incentives and constraints imposed by government. Particular attention is paid to the effects of taxation policies on equity values, economic growth, and savings. In the third section, the contributors present a supply-side view of selected international economic issues including the relationship between tax rate reductions and foreign exchange rates and the trade balance. The concluding section examines the portfolio strategies that can be derived from the analyses presented in previous chapters. An indispensable resource for finance executives, this book will also be of significant value to graduate students in economics, financial management, and business programs.

This volume considers the practical implications of government economic policies, illustrating how incentives and disincentives affect economic behavior and the performance of the economy through an in-depth discussion of monetary, fiscal, and international economic issues. The contributors present a unique top-down approach that enables the reader to trace the impact of government policies through the economy and thereby discover the investment strategies most likely to be successful within a given policy context.

Introduction by Victor A. Canto and Arthur B. LafferMonetary PolicyCapacity Utilization and Inflation by Victor A. CantoWorld Money and U.S. Inflation by Victor A. Canto and Alex WintersAlternative Monetary Theories of Inflation by Victor A. Canto and Arthur B. LafferMoney, Interest Rates, and Inflation: A Classical View by Victor A. Canto and Arthur B. LafferThe Quality of Inflation Indicators by Victor A. Canto and Arthur B. LafferThe Yield Curve: The Long and Short of It by Victor A. Canto and Arthur B. LafferFiscal PolicyBush's Economic Agenda within a Supply-Side Framework by Victor A. Canto and Arthur B. LafferTax Amnesty: The Missing Link by Martin G. Laffer and Arthur B. LafferFifteen Percent Is Fine, but Indexing Is Divine by Victor A. Canto and Harvey B. HirschhornStylized Facts and Fallacies of Capital Gains Tax Rate Reductions and Indexation by Victor A. Canto and Arthur B. LafferFriday the 13th: Triple Witching Hour for the Government by Victor A. Canto and Arthur B. LafferDebt and Taxes Are the Only Certainty by Arthur Gray, Jr., and Arthur B. LafferBorrowed Prosperity: The Astrology of Consumer Debt by John E. SilviaThe Savings Monster by Victor A. Canto and Arthur B. LafferAre We Climbing the Wall of Resistance toward National Health Insurance? by James BalogInternational Economic IssuesTax Rate Reductions and Foreign Exchange Rates by Victor A. CantoThe Trade Balance: Don't Worry, Be Happy by Arthur B. LafferNational Paedomorphosis: U.K. Progenesis, U.S. Neoteny by Arthur B. LafferPortfolio StrategiesThe Legend by Victor A. Canto and Arthur B. LafferMacroeconomic Shocks and Stock Prices by Victor A. Canto and Arthur B. LafferThe Small-Cap and State Competitive Environment: 1989-90 Update by Victor A. Canto and Arthur B. LafferInternational Stock Returns and Real Exchange Rates by Victor A. CantoIndex