Economic Thoughts

1. Rahn Curve
Eshref Huseynov & Nurlan Jahangirli

2. Rahn Curve
 An economic theory, proposed in 1996 by American economist Richard W. Rahn
 Indicates a level of government spending that maximizes economic growth
 The theory is used by classical liberals to argue for a decrease in overall government spending
and taxation
 Empirical studies which suggest that the optimal level of government spending is between 15
and 25% of GDP

3. Rahn Curve

4. Correlation between Rahn and
Laffer Curve
Professor Arthur Laffer illustrated
that there is tax revenue
maximizing tax rate
Similar way other authors try to
identify the government share of
GDP which maximizes the GDP
growth.
Rahn
Curve

5. Laffer Curve in 1970‘s

6. 0% 100%
Laffer Curve today

7. Government Spending in US

8. Government Spending in EU

9. Thank you for your
attention!