Definitions

Supply Side policy

Long-term government strategies used to increase the potential productive capacity of the economy by increasing the quality and/or quantity of factors of production.

Market-based supply-side policies

focus on freeing up markets and improving market incentives in order to increase aggregate supply, thereby improving incentives to increase investments and productivity and incentives to work

Deregulation

The reduction or removal of government rules and directives in an industry, with the intention of creating more competition and greater efficiency

the reduction or elimination of regulations in order to lower the costs of productions for firms, which encourages competition.

Privatization

a form of supply-side policy that involves the sale or transfer of state-owned assets to the private sector, in order to improve competition, efficiency and productivity.

Trade liberalization

the reduction or removal of trade barriers such as tariffs and quotas, thereby increasing competition, productivity and efficiency in international markets.

Anti-monopoly regulation

laws that control or limit the restrictive practices and market power of dominant firms in an industry

Labour market policies

Government policies designed to create greater flexibility and efficiency in the labour market.

A labour union

an organization that aims to protect the interests of its worker members, that is, the terms and conditions of employment, such as workers’ pay and benefits.

Unemployment benefits

welfare transfer payments made by a government to support people who are willing to work but cannot find employment

minimum wage

the lowest rate of pay that firms must pay to their employees per time period, as governed by the government

Incentive-related policies

e a form of market-based supply-side policies that create greater incentives to work, namely by cutting personal income tax and business taxes.

Interventionist supply-side policies

The deliberate attempts by a government to influence aggregate supply and the productive capacity of the economy.

Human capital

The accumulation of skills, knowledge and experience of the workforce, viewed in terms of their value or cost.

Research and development

the process of business activities to improve, introduce and innovate products, processes and procedures

Infrastructure

the physical and organizational structures and facilities of an economy necessary for its operations, such as transportation networks.

Industrial policies

interventionist supply-side policies aimed at encouraging the development and growth of the manufacturing sector of an economy in order to promote growth and employment.

capitals gains tax and business tax cuts

CGT is levied on corporations for the profits earned from the sale of assets such as stocks, bonds and real estates. Business tax is levied on a Corporation’s profit.