Introduction to Supply-side Policies

This lesson will introduce some of the market-oriented and interventionist supply-side macroeconomic policies a government may implement to promote the accomplishment of objectives such as full employment, economic growth and price level stability.
Supply side policies contrast with demand-side fiscal and monetary policies, which are aimed at stimulating or contracting the level of spending in an economy. Supply-side policies, on the other hand, are meant to stimulate production among the nation’s firms by either reducing the costs faced by firms through deregulation and labor market reforms or by improving the productivity of the human and physical capital available to producers. If successful, supply-side policies will stimulate job creation and economic growth, allowing output and employment to increase while maintaining a stable price level in the economy.