 The United States in the 1970s underwent "stagflation"—a wrenching period of low economic growth, high inflation and high interest rates and intermittent energy crises.Reagan was an adherent of supply-side economics, which argues that economic growth can be most effectively created using incentives for people to produce (supply) goods and services, such as adjusting income tax and capital gains tax rates.Accordingly, Reagan promised an economic revival that would affect all sectors of the population.