In this 1968 Chicago “Workshop” paper, “An Anti-Traditional Theory of the Balance of Payments Under Fixed Exchange Rates,” Laffer laid down his law. When a country grows relative to the world, it wants more goods and more money. No country is a net money importer for no sound reason throwing everything out-of-whack. The balance of payments is just that, a balance, and there is no crisis. Supply-side economics was born of this contention, championed in the 1960s by Laffer and Mundell.
